EM Government Debt Sinners and Saints

July 3, 2026 1:05 PM UTC

·       Overall, the clearest EM fiscal sinner is Brazil, given its tax revenue/GDP ratio is already very high and requires politically sensitive expenditure cuts after the October election to increase the primary surplus to stabilize the government debt/GDP trajectory and get real bond yield

U.S. June Employment - Upside May surprise offset, but unemployment falls on lower labor force

July 2, 2026 1:12 PM UTC

June’s non-farm payroll is weaker than expected with a 57k increase, 49k private, with downward revisions to April and May. The slowing is consistent with an upturn in the initial and continued claims trends, though both were almost unchanged (-1k to 215k and +2k to 1.814m respectively)  in the l

EZ HICP Review: Absence Second-Round Effects Continues

July 1, 2026 10:41 AM UTC

Contrary to some thinking, EZ HICP inflation continues to behave, both absolutely and relatively – ie to what looks ever excessive ECB price thinking.  The question must be if and when the ECB chooses to note friendlier price and costs signals, rather than pander to the upside prices risks that o

AI Boom and Bust?

June 30, 2026 10:45 AM UTC

•    While some are becoming wary that AI bust could arrive in coming quarters, AI labs revenue growth has been explosive and this sustains the vertical chain of datacenter demand and commitments for the hyperscalers and also buoyant semiconductor demand.  For 2027 and 2028 capital markets re

A Strong U.S. Q2 Report Now Looks Unlikely

June 29, 2026 1:18 PM UTC

After a sharp deterioration in May’s trade deficit, previously positive forecasts for Q2 GDP need to be trimmed significantly, though there is still uncertainty over June data. We now expect a Q2 GDP increase of only 0.9%, down from a  previous estimate of 2.3%. After an upward revision to Q1 our

Preview: Due July 2 - U.S. June Employment (Non-Farm Payrolls) - World Cup boost versus underlying slowing

June 25, 2026 7:12 AM UTC

We expect June’s non-farm payroll to rise by 115k overall and by 125k in the private sector, the former a slowing from 172k in May but the latter marginally stronger than May’s 120k increase. We expect the unemployment rate to remain at 4.3% for a fourth straight month and an in line with trend

Preview: Due July 2 - U.S. June Employment (Non-Farm Payrolls) - World Cup boost versus underlying slowing

June 23, 2026 6:31 PM UTC

We expect June’s non-farm payroll to rise by 115k overall and by 125k in the private sector, the former a slowing from 172k in May but the latter marginally stronger than May’s 120k increase. We expect the unemployment rate to remain at 4.3% for a fourth straight month and an in line with trend

U.S. June S&P PMIs - Manufacturing stronger still, Services less subdued

June 23, 2026 1:57 PM UTC

June’s preliminary S and P PMIs ae both improved, manufacturing impressively so at 55.7 from 55.1. Services are still subdued but at 51.3 from 50.7 are at their highest since February.

Eurozone Outlook: Has Inflation Peaked Already?

June 22, 2026 11:35 AM UTC

·       Under our only slightly updated view of no further fighting in the Middle East, we see oil and gas prices largely consolidating recent falls before falling afresh from mid-2027.The current situation is very different from that of 2022 and the Ukraine War in which the EZ lost access to

Brazil: Slowing Pace of Cuts and BRL Strength

June 19, 2026 6:55 AM UTC

·       Brazil cut the SELIC by 25bps to 14.25%, but received critiques from the market by raising end 2027 CPI inflation from 3.5% to 3.7% and talking about Q1 2028 in the relevant policy horizon. We feel that BCB still wants to leave the door open to further cuts in 2026, given how restrict

SNB: Holding Steady on Rates

June 18, 2026 7:54 AM UTC

The June quarterly assessment saw little shift in the forecasts for either growth or inflation (Figure 1), with the tone of the economic outlook remained guarded due to concerns over the Iran war on the global economy (forecasts though look to have been completed before the U.S. Iran deal).   With

BOJ: QT still 5-6% of GDP until 2030 at least!

June 17, 2026 6:25 AM UTC

·       Though the BOJ will maintain bond buying at Yen2trn pm from April 2027, huge redemptions means that net QT will be Yen45trn April 27-March 28 i.e. around 6.5% of GDP after QT at 6% of GDP in 2026.  Then JGB net reduction of Yen40trn (6% of GDP) FY 29 and Yen35trn (5.5% of GDP).  Wit

BoJ Review: One Percent

June 16, 2026 4:39 AM UTC

The BoJ hike rates by 25bps to 1% in the June meeting 

U.S. May Industrial Production - Pause in a positive trend

June 15, 2026 1:30 PM UTC

May industrial production with a 0.1% increase and manufacturing unchanged was on the weak side of expectations. Near term revisions were positive but revisions further back were negative. Capacity utilization at 76.2% was as expected and the highest since July 2025.

EM Europe and CIS: Select Country Risk Ratings

June 12, 2026 10:00 AM UTC

We provide country risk reviews for EM Europe/CIS countries including Russia and Ukraine. 

BoE Preview (Jun 18): Splits to Widen, But Stable Policy Outlook Intact

June 11, 2026 10:26 AM UTC

Not only this month, but we see the BoE being on hold for the rest of the year with rate cuts then resuming through 2027.  Although markets are pricing just over two hikes from the current 3.75% with a 50%-plus probability of the first being delivered at the July 30 MPC meeting, our view is hardly

Bank of Canada - On hold with balanced tone

June 10, 2026 3:21 PM UTC

While recognizing that oil is around $10 per barrel higher than was assumed in its April Monetary Policy Report, the Bank of Canada left rates unchanged at 2.25% with a balanced tone to the statement. As long as core inflation does not start showing feed through from energy the BoC looks likely to a

Norges Bank Preview (Jun 18): Forecast Update the Key

June 9, 2026 2:32 PM UTC

It may not have been a close call, but amid what were divided market expectations, the Norges Bank hiked afresh last month by 25 bp (to 4.25%), the first such move in two years.  Admittedly, it had given a clear pointer in March of at least one rate hike probable in subsequent next couple of months

Preview: Due June 17 - U.S. May Retail Sales - Consumers vulnerable to a pull back

June 8, 2026 1:28 PM UTC

 We expect May retail sales to increase by 0.3% both overall and ex autos, but with a 0.1% decline ex autos and gasoline, which would suggest that consumers are starting to pull back as elevated gasoline prices increasingly weigh on real disposable income. 

Canada May Employment - Recent weakness largely erased, wages correct lower

June 5, 2026 2:05 PM UTC

Canada’s May employment report keeps the series volatile, with a strong 87.8k bounce reducing unemployment to a four month low of 6.6%, from April’s 6-month high of 6.9%. This should ease any Bank of Canada worries over the weak Q1 GDP data which saw a second straight, if marginal, decline. The

Preview: Due June 5 - U.S. May Employment (Non-Farm Payrolls) - Slightly slower but still healthy

June 4, 2026 1:26 PM UTC

We expect May’s non-farm payroll to rise by 85k overall and by 90k in the private sector, less strong than in March and April but still showing a healthy labor market given a lack of growth in the labor force, leaving unemployment at 4.3% for a third straight month. We expect a 0.3% rise in in ave

Mexico Country Risk Rating

June 3, 2026 9:10 AM UTC

Mexico’s overall risk is medium-high.

Preview: Due June 10 - U.S. May CPI - Energy and air fares to lead

June 2, 2026 3:20 PM UTC

We expect May CPI to increase by 0.5% overall and 0.3% ex food and energy, with respective gains before rounding being 0.527% and 0.253%, meaning that the core rate is a close call between 0.2% and 0.3% before rounding. The extent of the energy feed through to air fares may be the swing factor in th

Turkish Economy Grew by a Below-Expectation 2.5% y/y in Q1

June 1, 2026 12:38 PM UTC

Bottom Line: The Turkish Statistical Institute (TUIK) announced Q1 2026 growth figures on June 1. Turkish economy expanded by a below-expectations 2.5% y/y in Q1. The main drag came from net trade as annual exports and imports shrank by 12.7% and 2%, respectively, while industrial sector contracted

Canada Q1 GDP details weak though preliminary estimate for April suggests a bounce in Q2

May 29, 2026 1:40 PM UTC

Canada’s Q1 GDP outcome of -0.1% annualized was significantly weaker than the 1.5% expected by the Bank of Canada and combined with surprisingly soft core CPI data for further damages the case for a BoC tightening in response to higher energy prices. Monthly data at -0.1% for March also disappoint

ECB April 30 Account: Not Willing to Look Through Energy Shock?

May 28, 2026 12:40 PM UTC

The Account of the April 30 ECB meeting offers few added clues with comments from Council member since more directly suggesting a precautionary if not pre-emptive 25 bp rate hike on June 11.  As was case back then, markets are seeing two such moves by September and a strong probability of a third b

EZ HICP Preview (Jun 2): Headline To Surge Again as Core Starts To Rise?

May 27, 2026 9:23 AM UTC

While somewhat important, the May flash HICP data is unlikely to have a material impact on ECB thinking, irrespective of whichever way it may surprise.  Most likely the data will show a further and still largely energy driven rise of 0.4 ppt, matching the April gain, but now to a 32-mth high of 3.4

CHP Leadership Crisis Threatens Disinflation Trajectory in Turkiye

May 26, 2026 11:20 AM UTC

Bottom Line: Political tensions remain high in Turkiye after the 36th Civil Chamber of the Ankara Regional Court of Justice annulled the opposition Republican People’s Party (CHP) 2023 leadership congress on May 21, 2026. The ruling removed elected CHP chairman Ozgur Ozel from his leadership posit

Europe: Anti-Immigration Vs More Negative Demographics

May 22, 2026 8:12 AM UTC

 A significant demographic tremor is gaining speed and breadth - globally. Just as politics – certainly in the west - is framed around ending or at least reducing and controlling immigration, it seems that the populists at the helm of such thinking are not considering the ramifications of such a

Eurozone: PMI Slump Shows Energy Surge Constraining Activity, Not Just Hitting Costs

May 21, 2026 8:36 AM UTC

Once again surprising on the downside flash Eurozone Composite PMI fell to 47.5 in May from 48.8 in April and below the 50.0 no-change mark for the second successive month. The latest reading thereby signalled a further and steeper m/m reduction in business activity, was the sharpest since October 2

UK CPI Review: Inflation Falls Broadly But A Calm Before the Storm?

May 20, 2026 6:42 AM UTC

What are energy induced price rises are now very evident, even more so in the latest PPI data very much contrasting with the more benign picture in April’s more closely watched CPI figures. Thus, having seen headline CPI jump to 3.3% in March and where services rose to 4.5% on the back if what may

UK Labor Market: Core Wage Pressures hit New Cycle -Low as Jobs Growth into Sharp Reverse

May 19, 2026 6:56 AM UTC

Even more clearly, there are further signs that the labor market is haemorrhaging jobs both clearly and broadly with fresh falls in the more authoritative measure of jobs covering payrolls.  Indeed, private sector payrolls are still falling, down over 0.8 ppt in y/y terms with the m/m drop the larg

U.S. May NAHB Homebuilders Index - Still little direction in trend

May 18, 2026 2:11 PM UTC

May’s NAHB homebuilders’ index of 37 has seen a stronger than expected correction from April’s dip to 34, but remains slightly below March’s index of 38 if level with those of January and February.

U.S. April Industrial Production - Led by a bounce in autos, but underlying trend positive

May 15, 2026 1:30 PM UTC

Following an upbeat Empire Sate manufacturing survey for May, April industrial production gives further evidence that the manufacturing sector is in good health, rising by a stronger than expected 0.7% overall with a 0.6% increase in manufacturing, though half of the latter came from autos.

UK Politics – A Laboured Labour Election Ahead?

May 14, 2026 12:55 PM UTC

It is somewhat ironic that as markets (particularly gilts) fret over a shift to the left causing less fiscal prudency, it is actually the centre of the Labour party that is fermenting the most uncertainty.  (Now Ex) Secretary Streeting has yet to make a formal bid to challenge PM Starmer for the le

Preview: Due May 14 - U.S. April Retail Sales - Consumers still resilient to headwinds

May 13, 2026 1:38 PM UTC

We expect April retail sales to increase by 0.7% overall with a rise of 0.9% ex autos, but only 0.5% ex autos and gasoline, the latter a marginal slowing from two straight 0.6% increases. Still, consumer spending continues to appear resilient to significant headwinds. 

UK CPI Preview (May 20): Inflation Sedate For Now But Wages Still on the Wane?

May 12, 2026 12:05 PM UTC

What are energy induced price rises are now very evident, most notably in PPI data as well as the more closely watched CPI figures. Thus after a stable 3.0% (a 10-mth low) February’s headline – matching the consensus, headline CPI jumped to 3.3% in March.  Services, however, rose from 4.3% a fo

Preview: Due May 12 - U.S. April CPI - Energy, air fares and a housing distortion

May 11, 2026 12:28 PM UTC

We now expect April CPI to increase by 0.6% overall and 0.4% ex food and energy, with respective gains before rounding being 0.57% and 0.41%. Energy is likely to add close to 0.2% to the overall gain and feed through from energy is likely to add around 0.1% to the core, largely in air fares. There i

Eurozone: In Dire Straits?

May 8, 2026 10:55 AM UTC

Amid all the concern about the energy-induced surge in inflation resulting from the Middle East conflict, the impact on EZ real economy looks to be sizeable and growing.  High profile PMI numbers are flashing alarmingly, but the message from the April composite (at a 17-mth low) may actually be not

Norges Bank Review: Pre-Emptive Price Pessimism

May 7, 2026 10:41 AM UTC

It may not have been a close call, but amid what were divided market expectations, the Norges Bank hiked afresh by 25 bp (to 4.25%), the first such move in two years.  Admittedly, it had given a clear pointer in March of at least one rate hike probable in the next couple of months but we had though

U.S. April ADP Employment - Labor market still looking healthy

May 6, 2026 12:38 PM UTC

April’s ADP’s estimate of private sector employment of 109k is slightly stronger than expected though not as strong as weekly ADP data had been hinting. Still, as the strongest increase since January 2025, it suggests the labor market is not weakening, suggesting Fed focus should be on inflation

Preview: Due May 12 - U.S. April CPI - Energy, air fares and a housing distortion (revised)

May 5, 2026 3:47 PM UTC

We now expect April CPI to increase by 0.6% overall and 0.4% ex food and energy, with respective gains before rounding being 0.57% and 0.41%. Energy is likely to add close to 0.2% to the overall gain and feed through from energy is likely to add around 0.1% to the core, largely in air fares. There i

Preview: Due May 12 - U.S. April CPI - Energy to rise less sharply than in March, but air fares to lift the core

May 4, 2026 3:56 PM UTC

We expect April CPI to increase by 0.5% overall and 0.3% ex food and energy, with the latter rising by 0.33% before rounding and the highest since January 2025. Seasonal adjustments will restrain the increase in gasoline but we expect feed through of energy prices to air fares to be factor in liftin

Norges Bank Preview (May 7): A Close Call?

May 1, 2026 12:31 PM UTC

The next Norges Bank decision next Thursday will be a close call, not least after the clear pointer from the Board in March that at least one rate hike looms in the next couple of months.  While we acknowledge the hawkish and active manner of the Board we adhere to a stable policy decision outlook

BoE Review: MPC Playing Its Cards Safely (For Now)?

April 30, 2026 12:29 PM UTC

Very clearly, the BoE kept rates on hold with the MPC last month and the same decision was both expected and delivered this time around but with only token fresh dissent, with Chief Economist Pill wanting an immediate hike from the current 3.75%.  But splits were more evident in the individual MPC

Bank of Canada - Policy seen appropriate under baseline assumptions, but risk may lean to upside

April 29, 2026 3:25 PM UTC

The Bank of Canada left rates unchanged at 2.25% as expected and Governor Macklem sees policy as appropriate under a BoC baseline that assumes oil prices evolves according to market expectations and US tariff rates remaining unchanged. This supports our view for steady BoC policy through 2026, thoug

U.S. April Consumer Confidence remains resilient, labor market view improves

April 28, 2026 2:26 PM UTC

The Conference Board’s consumer confidence index, as was the case in March, has proven surprisingly resilient to worries on gasoline prices, with the index seeing a third straight marginal rise, to 92.8 from 92.2.

BoJ Review: Hawkish Hold

April 28, 2026 4:53 AM UTC

The BoJ kept rates unchanged at 0.75% in the April meeting with a 6-3 vote

Straits of Hormuz Standoff and Mixed Markets

April 27, 2026 9:02 AM UTC

•    Equities longer time horizon means that they are hoping for a reopening of the Straits of Hormuz (though also being helped by renewed AI optimism), whereas government bond markets actually want to see tangible progress and an associated tempering of DM central banks posturing.  This dive