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

BoE Preview (Apr 30) Divided Again But Unmoved (For Now)?

April 24, 2026 9:34 AM UTC

Very clearly, the BoE kept rates on hold with the MPC unanimous last month and the same decision is expected this time around but with probable fresh dissent, with up to 2-3 members opting for an immediate hike.  These splits will be even more evident in the individual MPC member statements (as exp

South Africa Inflation Hit 3.1% y/y in March but Pressures Signal Looming Spike

April 23, 2026 10:40 AM UTC

Bottom Line: Following the decline in headline inflation to 3.0% y/y in February, South Africa’s inflation rose to 3.1% y/y in March. On a monthly basis, prices increased by 0.6% and the main drivers behind the rise were housing, utilities and financial services. The surge was driven by a combinat

FOMC Preview for April 29: Uncertainty keeping the Fed on hold

April 22, 2026 2:29 PM UTC

The FOMC meets on April 29 and there is little risk of a change in rates from the current target range of 3.5-3.75%. High uncertainty, both on the geopolitical situation and the future of the Fed, suggests there will be little forward guidance, and the dots will not be updated until the next meeting

UK Labor Market: Lower Jobless Rates Misleading, as Wage Pressures hit New Cycle -Low

April 21, 2026 6:54 AM UTC

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 0.5 ppt in y/y terms.  Admittedly, headlines may be formed around

Preview: Due April 21 - U.S. March Retail Sales - Surge on gasoline prices, underlying trend subdued

April 20, 2026 12:16 PM UTC

We expect March retail sales to surge by 1.4% largely on surging gasoline prices, with sales ex auto and gasoline even stronger at 1.6%. Ex autos and gasoline we expect a rise of only 0.2%, on the weak side of a trend that has recently lost momentum.

Equities: Still a Rocky Road in 2026

April 17, 2026 12:49 PM UTC

·       Any deal between the U.S. and Iran would still be seen as a positive win in equities, as it would raise hopes that it could be followed by a multi-year settlement that could include more Iran oil and gas into the global energy markets and lower energy prices. No deal is also feasible,

Eurozone; ECB Tone More Neutral Than Suggested by March Meeting Market Reaction?

April 16, 2026 12:18 PM UTC

Little new can be taken from the minutes to the March ECB Council 19 meeting, save that at least to us the ECB was too optimistic about growth and too pessimistic about inflation. In regard to the latter, while acknowledging tighter financial conditions, the ECB still seemed to be downplaying what a

Turkiye MPC Preview: Key Rate Will Likely Be Held Constant on April 22 MPC

April 15, 2026 3:40 PM UTC

Bottom Line: We think Central Bank of Turkiye (CBRT) will likely hold the policy rate stable at 37% during the MPC meeting scheduled for April 22 due to inflationary risks as both geopolitical uncertainties and domestic dynamics remain significant risk factors for the inflation outlook. Our end-year

Eurozone: ECB Downplaying Supply of Credit as it Focuses on its Cost

April 14, 2026 1:35 PM UTC

Even amid increasing suggestions that the Middle East conflict will reap marked real economy damage that should limit the length and extent of any inflation surge, markets are still pricing in almost three 25 bp ECB hikes in the coming year.  We think this is still very excessive and reflects an ou

UK CPI Preview (Apr 22): Inflation Being Fuelled But Watch Financial Conditions?

April 13, 2026 2:39 PM UTC

The stormy weather inflation wise is now very evident, most notably in UK fuel prices surging. Thus after a stable 3.0% (a 10-mth low) February’s headline – matching both consensus and BoE projections we see it jumping to 3.5% in March.  Services, however, may stay at 4.3% which was a four-year

China: Oil boosts PPI but CPI Less

April 10, 2026 7:37 AM UTC

•    Given lags and the still elevated oil prices for Q2/Q3 delivery it is likely that PPI will be further boosted in the coming months. This could boost 2026 China CPI by around 0.3-0.4% and we changed our 2026 forecast to 1.4% in the March Outlook (here) -- the higher price of Fertilizers wi

Preview: Due April 10 - U.S. March CPI - Energy to surge, but core rate seen similar to February

April 9, 2026 1:39 PM UTC

We expect March CPI to surge by 1.0% overall, which would be the strongest rise since June 2022, seen in the aftermath of the Russian invasion of Ukraine. However we expect only a moderate increase ex food and energy, of 0.22% before rounding, which would match that seen in February.

Eurozone: Manufacturing Seeing Excess Supply Not Excess Demand

April 8, 2026 11:13 AM UTC

In Europe generally, but especially in the EZ, it will be manufacturing that will bear the brunt of the recent jump in energy prices, where industrial electricity prices even before the conflict started were among the highest globally. While high energy costs affect all sectors, manufacturing’s re

Despite Monthly Pressures and Risks Persist, Inflation Eased to 30.9% in March

April 7, 2026 11:53 AM UTC

Bottom line: Turkish Statistical Institute (TUIK) announced March inflation figures, and Turkiye’s inflation edged down to 30.9% despite inflationary risks. The moderate slowdown in March was supported by the sliding tax system and the normalization in food prices after Ramadan. Our average infla

U.S. March Employment - Strong report suggests risks clearly higher on the inflation side

April 3, 2026 1:27 PM UTC

March’s non-farm payrolls is clearly on the strong side of expectations, up by 178k and an even stronger 186k in the private sector, with minimal net downward revisions of 7k. Unemployment unexpectedly fell to 4.3% from 4.4%. Less positive are a lower than expected 0.2% rise in average hourly earn

Preview: Due April 10 - U.S. March CPI - Energy to surge, but core rate seen similar to February

April 1, 2026 7:26 PM UTC

We expect March CPI to surge by 1.0% overall, which would be the strongest rise since June 2022, seen in the aftermath of the Russian invasion of Ukraine. However we expect only a moderate increase ex food and energy, of 0.22% before rounding, which would match that seen in February.

U.S. February Retail Sales and March ADP Employment resilient, but gasoline prices may undermine consumers

April 1, 2026 1:10 PM UTC

March’s ADP’s estimate of private sector employment of 62k is stronger than the market expected and similar to February’s 66k. February retail sales are also marginally firmer than expected, up by 0.6% overall, 0.5% ex autos and 0l;4% ex autos and gasoline.  In March consumers will be dealing

Eurozone Labor Market: A Structural and Disinflationary Shift?

April 1, 2026 10:00 AM UTC

That we think the ECB is being optimistic about the real economy and labor market outlook is almost an understatement made all the more so since the outbreak of the Iran War.  In the ECB’s latest baseline scenario, recession is clearly avoided and the jobless rate, while revised a little higher (

U.S. March Consumer Confidence resilient to higher inflation expectations, February job openings trend near flat

March 31, 2026 2:30 PM UTC

Despite a bounce in inflation expectations, the Conference Board’s consumer confidence index is surprisingly stronger in March at 91.8 from 91.0, a second straight rise though not fully erasing a January dip. February JOLTS data on job openings suggests a fairly stable labor market picture.

EZ HICP Review: Headline Surges as Core Slips Back?

March 31, 2026 9:44 AM UTC

The first of the Iran War induced rise in prices has arrived but with the flash March HICP data a little below expectations, both the consensus and that of the ECB.  Instead, the headline rate spiked higher to 2.5% from February’s 1.9%, but with the core rate falling back (Figure 1) underscoring

Markets: Short vs Long Iran War

March 30, 2026 8:00 AM UTC

·       For a 4-8 week war and 3-4 quarters of energy price normalisation, we see a 10% U.S. equity market correction in H1 2026 driven by the current Iran war and/or consumption slowing due to lower (real) wage growth, alongside still stretched valuations in equity and equity-bond terms.  T

Mexico: March 25bps Cut, Then September?

March 27, 2026 8:01 AM UTC

Banxico decided to cut the policy rate by 25bps from 6.75% due to concerns over the economy, which could be hurt additionally by the Iran war.  However, Banxico inflation forecasts are yet to reflect the shift in oil prices and the prospect of further upward revisions argue against a May or June cu

EZ HICP Preview (Mar 31): Headline to Surge but Core to Slip Back?

March 26, 2026 1:54 PM UTC

The first of the Iran War induced rise in prices arrive in the coming week with flash March HICP data.  We see the headline rate spiking higher to 2.6%-2.7 from February’s 1.9%, the former largely chiming with that implied ECB thinking from the latter’s recent updated projections.  But both it

UK CPI Review: Goodbye to the Good Old Days?

March 25, 2026 7:33 AM UTC

After January’s clear fall, even in the core rate, where the headline CPI rate fell from December’s 3.4% to 3.0% (a 10-mth low) it stayed there in February’s numbers – matching both consensus and BoE projections.  Services fell 0.1 ppt to 4.3% which was a four-year low (Figure 1) but the co

Eurozone Outlook: Conflicts of Interest

March 24, 2026 9:55 AM UTC

·       Under our more likely view of limited further fighting in the Middle East, we see oil and gas prices largely falling back to the pre-war levels within a year, with the current situation very different from that of 2022 and the Ukraine War in which the EZ lost access to Russian gas as

Norges Bank Preview (Mar 26): How Hawkish Will the Board Sound?

March 23, 2026 10:56 AM UTC

While no change in policy is expected from the Norges Bank’s verdict due on Mar 26, a clear shift in rhetoric is almost inevitable.  It may very well drop its recently repeated assertion that ‘the policy rate will be reduced further in the course of the coming year’.  The question is whether

Canada January retail sales - Positive start to Q1, but risks ahead

March 20, 2026 12:46 PM UTC

January Canadian retail sales with a 1.1% increase have fallen short of the provisional 1.5% estimate made with December’s report. Sales rose by 0.8% ex autos, 0.9% ex autos and gasoline and 1.0% overall in real terms.  The preliminary estimate for February is for a 0.9% increase.

BoE Review: A Fragile MPC Truce?

March 19, 2026 12:59 PM UTC

Very clearly, the BoE kept rates on hold with no dissents as it understandably waits for more information about the length, breadth and repercussions of the Iran war.  The individual MPC member statements (as expected) showed diverging views as to the extent and reaction of what are now unfolding r

Bank of Canada - Uncertainty Heightened Further but a Dovish Leaning

March 18, 2026 3:17 PM UTC

The Bank of Canada left rates at 2.25% as expected, but with uncertainty heightened still further removed from its statement a reference to the current policy being appropriate provided the economy evolves as expected. Uncertainty on policy has increased too. However, the BoC has taken a more dovish