U.S. September Employment - Case for a December easing looks a little weaker

November 20, 2025 2:04 PM UTC

September’s non-farm payroll will be the last released before the December 10 FOMC meeting and is surprisingly firm at 119k, albeit with 33k in negative revisions. A rise in unemployment to 4.4% from 4.3% and a 0.2% rise in average hourly earnings provide only marginal offsets to the headline. Nov

November 19, 2025 2:38 PM UTC

We expect September’s non-farm payroll, delayed from October 3, to show another subdued rise,  of 45k, with 50k in the private sector, but marginally stronger than July’s respective gains of 22k and 38k. We expect unemployment to slip to 4.2% from 4.3% on a fall in the labor force, while averag

Markets 2026

November 18, 2025 10:30 AM UTC

·        The Fed, ECB and BOE will likely drive further 10-2yr government bond yield curve steepening, with 10yr Bund yields rising due to ECB QT and German fiscal expansion. 10yr JGB yields are set to surge through 2%, as BOJ QT remains excessive and underestimated.  The BOJ could partiall

Japan/China Tensions Over Taiwan

November 13, 2025 10:45 AM UTC

China wants to make Japan cautious about helping the U.S. in future military scenarios.  With PM Takaichi tougher stance, China could decide to escalate tensions to reduce the risk of Japan becoming involved in future years.  This could be restrictions of some critical minerals from China to Japan

UK Gilts: Fiscal, Politics and BOE

November 12, 2025 9:55 AM UTC

·        2yr Gilt yields have scope to fall through 2026, as we see growth and inflation slowing more than the BOE and this will likely see the MPC changing view and cutting policy rates to 3.25% in H1 2026. Though a pause could then be seen, we see one final BOE cut then being delivered to

EZ Rates: 2026 ECB Easing But 2027 French Crisis?

November 11, 2025 9:45 AM UTC

·       Financial conditions are tighter than suggested by a 2% ECB depo rate, which will both dampen an EZ economic pick-up and cause further disinflation.  We see the ECB delivering two further 25bps cuts to a 1.5% ECB depo rate, which can mean a further decline in 2yr Bund yields.  Howev

U.S. Equities: Smaller Correction But Still Overvalued

November 6, 2025 10:25 AM UTC

·       We are revising up our end 2025 S&P500 forecast from 6000 to 6500 for a number of reasons. Private sector data shows the risk of a U.S. hard landing is lower than a couple of months ago, with economic data more consistent with a soft landing.  Additionally, the tech/AI optimism has n

Japan: Not Abenomics 2

November 5, 2025 10:30 AM UTC

·       While some fiscal stimulus into 2026 is likely from the new PM Takaichi, this is unlikely to be aggressive given the JGB supply pressures and the need for support from other parties in passing fiscal measures.  A return to QE (2nd arrow of Abenomics) is highly unlikely, with the BOJ

Preview: U.S. October CPI - An important number that may never be seen

November 4, 2025 3:59 PM UTC

October US CPI, while scheduled on November 13, may never be released even if the government  shutdown is resolved, given lack of data collection during the month of October. However what the number would have been does matter. Our forecast is for a 0.2% increase overall, with a 0.3% rise ex food a

U.S. Treasuries: Waiting for Data and Yield Curve Steepening

November 4, 2025 1:57 PM UTC

•    Multi quarter we still look for 75bps of further Fed easing by end 2026, which will likely initially bring 2yr yields down to 3.4%.  However, once the Fed Funds rate get closer to 3.0-3.25% and the slowdown turns into a soft landing, the 2yr will likely move to a premium versus Fed Funds

FOMC - Strong Differences of Opinion Leave December Decision Dependent on Incoming Information

October 29, 2025 7:58 PM UTC

After a statement that contained no major surprises, the highlight of FOMC Chairman Jerome Powell’s press conference was his comment that there were strong differences on policy going forward, and that a December ease was far from assured. While we still feel that on balance easing in December is

FOMC eases by 25bps, to conclude quantitative tightening on December 1

October 29, 2025 6:21 PM UTC

The FOMC has eased rates by 25bps to a 3.75%-4.00% range as expected and decided to conclude the reduction of its securities holdings on December 1 as Chairman Powell had hinted at on October 14. There were two dissents, Governor Miran favoring a 50bps move and Kansas City Fed’s Schmid delivering

U.S. September CPI - Soft enough for an October FOMC easing but still above target

October 24, 2025 12:58 PM UTC

September CPI is on the low side of expectations at 0.3% overall, 0.2% ex food and energy, and should not pose an obstacle to a likely 25bps easing at the October 29 FOMC meeting. The core rate was up by 0.23% before rounding, slower than July and August gains that rise by more than 0.3% before roun

October 23, 2025 1:07 PM UTC

While the government shutdown continues with no sign of a near term deal, September’s US CPI, originally scheduled for October 15, will be released on October 24. The release was considered essential as it is needed for annual cost of living adjustments to Social Security benefits. It is however p

Preview: Due October 24 (even if shutdown continues) - U.S. September CPI - Firm but a little less so in core rate

October 13, 2025 1:58 PM UTC

While the government shutdown continues with no sign of a near term deal, September’s US CPI, originally scheduled for October 15, will be released on October 24 even if the shutdown continues through then. The release was considered essential as it is needed for annual cost of living adjustments

U.S. Q3 GDP heading for a rise of 2.3%, led by consumer spending and business investment

October 6, 2025 3:23 PM UTC

With the US government shutdown not looking set for a quick resolution, it is a good time to take a fresh look at Q3 GDP, which is scheduled for October 30, the day after the FOMC next meets, though the release could be delayed even if the shutdown is over by then. We now look for an increase of 2.3

DM Central Banks: Wider-Ranging Conditions More Than Neutral Rates

October 2, 2025 6:55 AM UTC

·        Neutral policy rate estimates and forward guidance provide some help at the start of easing cycles, but less so at mid to mature stages.  For the Fed, ECB and BOE we look at a wider array of economic and financial conditions, alongside our own projections over the next 2 years to m

Preview: Due October 15 (dependent on shutdown ending) - U.S. September CPI - Firm but a little less so in core rate

October 1, 2025 6:29 PM UTC

We expect September CPI to increase by 0.4% overall and by 0.3% ex food and energy, matching August’s outcomes after rounding, though before rounding we expect overall CPI to be rounded down from 0.425%, and the core rate to be rounded up from 0.28%, contrasting August data when headline CPI was r

AI/Humanoid Robots and Disinflation?

October 1, 2025 9:40 AM UTC

·       Overall, a number of forces from the AI wave will impact inflation.  Power demand could push up power prices, but productivity enhancements and product innovation could be disinflationary like Information and Communications technology (ICT).  One other key uncertainty on a 1-5 year

DM Government Bond Saints v U.S.

September 29, 2025 7:35 AM UTC

·       Overall, although the fiscal saints (Australia/Canada/Germany/Sweden) have merits over the U.S. in the scenario where Fed independence is undermined and more Fed rate cuts occur than warranted by the economics, the 10yr area of other government bond markets may not outperform. 10yr go

September Outlook: Into 2026 -- Market Implications

September 26, 2025 9:00 AM UTC

Our September Outlook is now published and please see all our markets chapters below.  

September Outlook: Into 2026

September 25, 2025 6:20 AM UTC

Our September Outlook is now published and please see all our economic and policy chapters below.  

Preview: Due October 3 - U.S. September Employment (Non-Farm Payrolls) - Still subdued, but slightly stronger than in August

September 24, 2025 3:28 PM UTC

We expect September’s non-farm payroll to show another subdued rise,  of 45k, with 50k in the private sector, but marginally stronger than July’s respective gains of 22k and 38k. We expect unemployment to slip to 4.2% from 4.3% on a fall in the labor force, while average hourly earnings maintai

DM FX Outlook: USD steadies but vulnerable to equity correction

September 23, 2025 2:48 PM UTC

·       Bottom Line: The USD has continued to edge lower against the EUR in the last quarter as market expectations of Fed easing have increased following clear weakening in U.S. employment growth. But at this stage the data doesn’t indicate we are heading for recession, and this suggests w

Asia/Pacific (ex-China/Japan) Outlook: Balancing Moderation with Resilience

September 23, 2025 11:22 AM UTC

·       Asia’s growth trajectory in 2026 reflects regional resilience under strain. Investment-led economies like India and Malaysia are sustaining momentum via infrastructure push, public capex, and digital industrial policy, while Indonesia’s outlook is clouded by fiscal recalibration a

Outlook Overview: Into 2026

September 23, 2025 8:25 AM UTC

·       The critical question is how much the U.S. economy is slowing down with the feedthrough of President Donald Trump’s tariffs to boost inflation and restrain GDP growth, with the effective rate currently around 17% on U.S. imports. Though semiconductor tariffs are likely, the bulk of

DM Rates Outlook: Steepening Yield Curve The Old Normal?

September 23, 2025 7:53 AM UTC

•    We continue to forecast further yield curve steepening across the U.S./EZ and UK, driven by cumulative easing.  For the U.S. this can see a modest further decline in 2yr yields, but the prospect is for a move to a premium of 2yr to Fed Funds (unless a hard landing is seen).  10yr yields

Equities Outlook: Correction Then Up In 2026

September 23, 2025 7:15 AM UTC

•    The U.S. equity market’s bullishness reflects good corporate earnings reality, buybacks and the AI story.  However, we feel that the U.S. economy can deteriorate still further in the coming months, as the lagged effects of tariffs boost inflation and restrain spending/hurt corporate ea

Commodities Outlook: Markets in Motion

September 22, 2025 10:30 AM UTC

OPEC+ has entered a new supply cycle, gradually reversing a second layer of voluntary cuts. The latest 1.65 mln b/d tranche is being phased out at 137,000 b/d monthly, likely completed by September 2026, while 2 mln b/d of group-wide cuts remain until the end of 2026. Non-OPEC supply growth will lik

U.S. Outlook: Fed Easing to Prevent Recession, but May Also Keep Inflation Above Target

September 22, 2025 10:15 AM UTC

•    GDP growth, supported in particular by business investment, was resilient in Q2, but growth in employment is now minimal and that will weigh on consumer spending, particularly with tariff-supported inflation set to restrain real wage growth. Recession is a risk if we see a vicious circle

Charting Our Views: Technical Analysis for Q4 2025

September 19, 2025 8:10 AM UTC

Our latest quarterly technical analysis views on Bonds, Equities, Commodities and FX is now available.  

Fed: Signals 25bps October and December

September 17, 2025 7:39 PM UTC

The median Fed Funds is a strong hint that the Fed will deliver an extra 50bps most likely with 25bps in October and December.  However, the split in the 2026 Fed Funds dots forecasts from FOMC members suggests that our forecast of just below trend growth and core PCE above target will likely mean

FOMC eases by 25bps, dots see two more 25bps moves this year

September 17, 2025 6:23 PM UTC

The FOMC has eased rates by 25bps to 4.0% to 4.75% with only one dissenting vote, the incoming Miran voting for 50bps. The main story in the dots is that the median sees two further 25bps moves this year rather than the expected one before seeing only one move in both 2026 and 2027, with no further

September 16, 2025 10:53 AM UTC

In the unexpected scenario of an early death, Putin and Xi have no clear successors, and any new Russia or China leader would have to spend time building domestic strength and compromising on external goals. Erdogan also has no clear successors, which could create political uncertainty. For Trump su

U.S. August CPI, Weekly Initial Claims - Risks on both sides of Fed mandate but possible seasonal adjustment issues for Claims

September 11, 2025 1:07 PM UTC

August CPI is firmer than expected overall at 0.4% and while the core rate was as expected at 0.3% its rise before rounding at 0.346% is uncomfortably high emphasizing the upside risks to the Fed’s inflation mandate. Initial claims at 263k from 236k however point to downside risks to the Fed emplo

Preview: Due September 11 - U.S. August CPI - Tariff impact slowly building

September 10, 2025 1:15 PM UTC

We expect August CPI to increase by 0.4% overall and by 0.3% ex food and energy, with the respective gains before rounding being 0.37% and 0.31%. This would be the second straight gains slightly above 0.3% in the core rate with the impact of tariffs starting to escalate.

September 10, 2025 10:55 AM UTC

Steeper yield curves are a function of monetary easing cycles, budget deficits, lower central bank holdings of government bonds, a move towards pre GFC real rates and shifting demand from pensions funds and life insurance companies.  Scope exists for further steepening in the U.S., EZ and UK with m

U.S. March 2025 Non-Farm Payroll Benchmark Revised Down by a Preliminary 911k

September 9, 2025 2:32 PM UTC

The preliminary estimate for the downward revision to the March 2025 non-farm payroll benchmark at -911k is steeper than generally than expected and exceeds even the unusually sharp 818k negative revision reported a year ago for the March 2024 benchmark. The data will be incorporated into the Januar

Expecting a Negative Non-Farm Payroll Benchmark Revision

September 8, 2025 3:25 PM UTC

Tuesday sees the release of the preliminary Labor Dep’t estimate for the March 2025 non-farm payroll benchmark, with expectations for a significant negative, possibly as large as the -818k preliminary estimate for the March 2024 benchmark delivered a year ago. The eventual revision to March 2024 p

U.S. August Employment - Trend now close to flat, backing case for easing

September 5, 2025 1:03 PM UTC

August’s non-farm payroll shows that job growth is now minimal, with a rise of 22k almost completely offset by a modest 21k in net downward revisions. Unemployment rose to 4.3% from 4.2% while average hourly earnings rose by 0.3%, both as expected, though the workweek was weaker than expected. The

Preview: Due September 5 - U.S. August Employment (Non-Farm Payrolls) - Similar to July's, still not recessionary

September 4, 2025 2:45 PM UTC

We expect August’s non-farm payroll to look similar to July’s, with a rise of 65k versus 73k in July, above the 14k rise of June and the 19k rise of May but well below the trend that was running above 100k through April. We also expect unemployment to remain at July’s 4.2% rate and a second st

Protests Return to Jakarta—No Threat to Regime, But Signal to Watch

September 2, 2025 12:41 PM UTC

Indonesia’s recent protests are not just about housing allowances—they reflect deeper disillusionment with elite politics. The government may contain unrest in the short term, but the structural issues driving dissent will persist. For businesses and investors, expect periodic social volatility,

Aging: Slow Growth for Some in 2020’s

September 1, 2025 8:35 AM UTC

   Population aging always seems to be beyond the market horizon, but the 2020’s are already seeing population aging in some countries.  What is the economic impact? Aging is already causing a peak in labor force in China and the EU. Meanwhile, the population pyramid also means less consumptio

Preview: Due September 11 - U.S. August CPI - Tariff impact slowly building

August 28, 2025 5:19 PM UTC

We expect August CPI to increase by 0.4% overall and by 0.3% ex food and energy, with the respective gains before rounding being 0.37% and 0.31%. This would be the second straight gains slightly above 0.3% in the core rate with the impact of tariffs starting to escalate.

Preview: Due September 5 - U.S. August Employment (Non-Farm Payrolls) - Similar to July's, still not recessionary

August 27, 2025 2:20 PM UTC

We expect August’s non-farm payroll to look similar to July’s, with a rise of 65k versus 73k in July, above the 14k rise of June and the 19k rise of May but well below the trend that was running above 100k through April. We also expect unemployment to remain at July’s 4.2% rate and a second st

France and Italy: Deficit, ECB QT and Foreign Debt Holders Stories

August 26, 2025 7:35 AM UTC

A large budget deficit in France, looking persistent given the current political impasse, combined with ECB QT means that the market has to absorb a very large 8.5% of GDP of extra bonds. Our central scenario is that persistent French supply causes a further rise in 5yr plus French government yields

U.S. July CPI - Core rate, particularly services, a marginal disappointment

August 12, 2025 1:02 PM UTC

July’s CPI is in line with consensus at 0.2% overall, 0.3% ex food and energy, but the core rate of 0.322% before rounding is a little high for comfort. The detail shows the acceleration from June was more in services than goods, so the story is not a simple one of tariffs. 

Preview: Due August 12 - U.S. July CPI - Tariff impact slowly building

August 11, 2025 1:10 PM UTC

We expect July CPI to increase by 0.2% overall and by 0.3% ex food and energy, with the overall pace close to 0.2% even before rounding but the core rate rounded up from 0.26%. This would still be the strongest core rate since January and reflect a further feed through of tariffs, something that is

EM Rates: Domestic Fundamentals Dominate

August 7, 2025 9:30 AM UTC

Once trade is agreed with the U.S., the good fundamentals actually argue for a 10yr Mexico-U.S. spread close to 400bps and this is our favored strategic risk reward for big EM government bonds. In Brazil a case can be made for a 12.75% policy rate end 2026 and 10% in 2027, but this could only mean 1