China’s 2nd Tier Banking Problems

November 7, 2025 2:45 PM UTC

China’s residential property bust continues to feedthrough to some bank’s non-performing loans and financial stability. Even so, the latest PBOC financial stability report shows the percentage of high risk rated banks has not increased over the last 12 months, while China authorities early warni

Banxico: December In Doubt and Pause Closer

November 7, 2025 9:56 AM UTC

The December Banxico meeting is not guaranteed to see a further 25bps cut, with the November Banxico statement showing more caution over persistent core inflation pressures and given the cumulative easing already seen. Combined with the risk of a Fed pause in December, plus Banxico’s Mexican Peso

Russia’s Inflation is Expected to Continue to Soften in October Likely Hitting Below 8.0% y/y

November 6, 2025 2:39 PM UTC

Bottom Line: We expect Russian inflation to continue its decreasing pattern in October thanks to lagged impacts of previous aggressive monetary tightening coupled with softening food prices and decreasing core inflation. October inflation figures will be announced on November 14, and we foresee Yr/Y

BoE Review: Fiscal Elephant in the Room Ignored – For Now!

November 6, 2025 1:47 PM UTC

A tight vote was always likely for the November MPC verdict, but the 5:4 split was closer than expected, but almost a repeat of the August decision when rates were cut to the current 4%.  What seems clear is that the effective swing voter was Governor Bailey but who coloured his decision with a cle

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

Norges Bank Review: All Ready For December Cut?

November 6, 2025 9:31 AM UTC

No change in policy and little shift in rhetoric was the message from the Norges Bank’s latest verdict.  After what was to some a surprise (and seemingly far from a formality) move in September, in which the Norges Bank cut is policy rate by a further 25 bp to 4.0%, we see no change at Nov 6 verd

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

Sweden Riksbank Review: Board Sticks to it Plans

November 5, 2025 9:44 AM UTC

As we anticipated in our preview, the Riksbank Board is pleased with the data flow since its last and very probably final rate cut on Sep 23 (to 1.75%).  GDP indicators suggest a strong Q3 showing of over 1% q/q while previously troublesome CPI data have softened appreciably thereby confirming (bot

Canada Budget Sees Larger Deficits, Slower Growth

November 4, 2025 9:58 PM UTC

Canada’s budget has seen the deficit for 2025-26 revised up to C$78.3bn from C$42.2bn in the December 2024 statement, which will now be 2.5% of GDP versus 1.3%, still a level that is quite small compared to many other developed countries. The deficit is projected to slip after that, reaching C$56.

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

UK GDP Preview (Nov 13): Cyber Crime Shock but Underlying Economy Listless

November 3, 2025 4:01 PM UTC

Notably, the level of UK GDP has hardly moved since March but we think there will be distinct setback in the September numbers where the cyber-attack of JLR vehicle manufacturing may be sizeable – car reduction may have fallen some 25% m/m-plus in the month alone.  As a result, we see September G

Inflation Slightly Edged Down in October: But MoM Stood High at 2.5%

November 3, 2025 10:50 AM UTC

Bottom line: Turkish Statistical Institute (TUIK) announced October inflation figures on November 3. Turkiye’s y/y inflation moderately softened to around 32.9% in October from 33.3% in September while upside-tilted inflation risks continued limiting the downward trend during the ongoing disinfla

China: Fiscal Stimulus Modest Rather than Large?

November 3, 2025 9:07 AM UTC

•    Overall, we see around a Yuan2.0-2.5trn fiscal stimulus for 2026 and some of this could be announced in December but the majority in March 2026.  This reflects the fiscal constraints on China authorities; the targeted focus in the 2026-31 five year plan and reluctance to spending on hous

EZ HICP Review: Services Inflation Problematic?

October 31, 2025 10:39 AM UTC

With what were previously unfavourable energy-related base effects reversing, EZ inflation edged down 0.1 ppt to 2.1% in October, largely in line with consensus thinking, but with the main core rate stable at 2.4%.  The latter reflected a slight pick-up in services (up 0.2 ppt to a six-mth high of

U.S./China Trade Framework: Avoiding Escalation

October 31, 2025 7:48 AM UTC

·         The U.S./China framework deal avoids renewed escalation of trade tension, but is unlikely to be followed by a comprehensive trade deal in 2026 as China does not want major import and bilateral trade commitments.  The economic effects will likely be small and the deal main aim app

October 30, 2025 3:23 PM UTC

There ie nothing tangible in the ECB update today to suggest that a further easing is likely at the next meeting on Dec 17-18.  However, amid a hint of what we think is a complacent upgrade about the EZ’s resilience alongside a perceived reduction in global risks, the easing window has not been c

Turkiye: Macroeconomic Problems Limit Long Term Growth

October 30, 2025 12:25 PM UTC

Bottom line: We forecast 3.5%-4.0% GDP growth in Turkiye in the 2026-2030 period. We are concerned with the macroeconomic problems will stay critical until 2027/2028, including stubborn inflation, trade and budget deficits, and weakening Turkish Lira (TRY). Despite growing population and young labor

October 30, 2025 10:25 AM UTC

 It continues to be the case that, for an economy that has seen repeated upside surprises and apparently above trend growth, now some 1.3% in the year to Q3, GDP data do not seem to have had much impact is shaping, let alone dominating, ECB policy thinking save to encourage a Council view of EZ eco

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

BoE Preview (Nov 6): Easing Door Opening Afresh?

October 29, 2025 4:43 PM UTC

That the BoE kept Bank Rate at 4% after last month’s MPC meeting was all but certain, as was the two vote dissent in favor of further easing.  But of more note, and amid what have been recent hawkish hints from the MC majority, was that the MPC adhered to its (conventional) policy guidance, still

Bank of Canada - Hawkish Ease with Current Rate Level Seen as Appropriate

October 29, 2025 3:40 PM UTC

The Bank of Canada delivered a hawkish easing, cutting rates for the second straight meeting by 25bps, to 2.25%, but stating that if inflation and activity evolve in line with its projection, the current rate is seen as about the right level to keep inflation close to 2% while helping the economy th

October 29, 2025 10:35 AM UTC

Having delivered what was described as a final rate cut last time around (ie Sep 23), the Riksbank Board will be pleased with the data flow since.  GDP indicators suggest a strong Q3 showing of over 1% q/q while previously troublesome CPI data have softened appreciably thereby confirming suspicions

Turkiye Inflation Preview: Inflation will Slightly Soften in October Despite Risks Dominate

October 28, 2025 4:43 PM UTC

Bottom line: After hitting 33.3% annually in September, we expect Turkiye’s inflation will likely soften moderately to around 32.5% in October while upside-tilted inflation risks limiting the downward trend during the ongoing disinflationary process. September inflation suggested that the pace o

Eurozone: Tighter Credit Standards By EZ Banks Confirmed

October 28, 2025 9:44 AM UTC

Hardly a surprise despite the ECB suggestions to the contrary as the reported net tightening credit standards merely accentuates trends in the two previous Bank Lending Surveys (BLS).  This updated BLS therefore echoes what we have seen in other ECB surveys and in actual credit dynamics and thus un

UK Food Inflation; Not Just a Domestic Issue, Despite Industry Claims

October 28, 2025 8:45 AM UTC

Food price inflation is becoming an increasing issue for both policy makers and households as well as companies that are generating and selling the produce. Particularly in the UK, rising food price inflation is helping shore up well-above target CPI inflation and thereby deterring the BoE from what

U.S-China Trade Tensions Ease, US-Canada Tensions Escalate

October 27, 2025 3:32 PM UTC

Trade tensions between the US and China appear to be easing, with it looking increasingly unlikely that the US will impose a threatened extra 100% tariff on China on November 1. However trade tensions with Canada have increased, with Canada receiving an extra 10% tariff, adding to downside economic

ECB Monetary Worries Emerging as Corporate Credit Dynamics Weaken More Clearly

October 27, 2025 10:36 AM UTC

As a foretaste of the Bank Lending Survey BLS) due tomorrow, the ECB released two associated pieces of data today, both corroborating and continuing an ever worrying pattern, namely weakness in corporate credit. The data showed growth in later has fallen to its lowest in almost two years (Figure 1).

Norges Bank Preview (Nov 6): On Hold but Another Cut Flagged By End-Year

October 27, 2025 9:26 AM UTC

After what was to some a surprise move in September, in which the Norges Bank cut is policy rate by a further 25 bp to 4.0%, we see no change at Nov 6 verdict.  After all, there will be no fresh forecasts, albeit with the Board likely to reinforce existing hints of a further 25 bp move at the Dec 1

Unexpectedly, CBR Reduced Key Rate to 16.5% on October 24

October 24, 2025 4:53 PM UTC

Bottom Line: Despite we expected Central Bank of Russia (CBR) to hold the policy rate constant at 17% during the next MPC on October 24 since the pace of the fall in inflation decelerated in September due to heightened gasoline prices after Ukraine stepped up hitting oil refineries in Russia; CBR de

FOMC Preview for October 29: 25bps Easing but Little Forward Guidance

October 24, 2025 3:49 PM UTC

The FOMC meets on October 29 and a 25bps easing to 3.75%-4.0% looks likely, particularly after September’s CPI came in on the low side of expectations.  The statement is however still likely to express concerns over inflation while the scale of downside risks on activity are uncertain, and not on

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

Turkiye MPC Review: Cautious CBRT Reduced Key Rate by 100 bps to 39.5%

October 23, 2025 2:18 PM UTC

Bottom Line: As we expected, Central Bank of Turkiye (CBRT) cut the policy rate by 100 bps to 39.5% during the MPC meeting on October 23 citing slowdown in disinflationary process due to renewed inflationary risks. Our end year key rate prediction remains at 37.0% for 2025 despite the fact that it w

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

EZ HICP Preview (Oct 31): No Halloween Horror from HICP Update

October 23, 2025 12:09 PM UTC

Mainly due to unfavourable base effects, EZ inflation has edged up in the last few months, but we think that this is temporary and that a fresh fall, possible to below the 2% target may occur in the October flash numbers – with a formal forecast of a 0.3 ppt drop to 1.9% and the core falling almos

When And How Will the U.S. Government Shutdown End?

October 22, 2025 3:01 PM UTC

The US government shutdown is now entering its fourth week and there are no signs of an imminent solution, though once progress starts, it could gain momentum quickly. It looks likely that pressure to reach a solution will start to build in early November, though the nature of the eventual settlemen

South Africa Inflation Slightly Surged to 3.4% YoY in September

October 22, 2025 2:01 PM UTC

Bottom Line: Statistics South Africa (Stats SA) announced on October 22 that annual inflation edged up to 3.4% YoY in September from 3.3% YoY in August due to accelerated housing, restaurant and utilities costs. Despite inflation is still within the South African Reserve Bank’s (SARB) 3%-6% targe

Eurozone Flash GDP Preview (Oct 30): Resilience in the Dock?

October 22, 2025 9:11 AM UTC

As we highlighted repeatedly of late, for an economy that has seen repeated upside surprises and apparently above trend growth, now some 1.4% in the year to Q2, GDP data do not seem to have had much impact is shaping, let alone dominating, ECB policy thinking. But we think this may shift as the ECB

October 22, 2025 7:05 AM UTC

After the upside (and broad) June CPI surprise, CPI inflation rose further, up another 0.2 ppt to 3.8% in July, higher than the consensus but matching BoE thinking. Despite adverse rounding and fuel costs, the headline stayed there in the August figure, and did so again in September in what was a lo

Bank of Canada Preview for October 29: A Pause before easing resumes in December

October 21, 2025 3:52 PM UTC

While we do not believe the Bank of Canada is done with easing, we expect the October 29 meeting to see rates left on hold at 2.50% given that most recent data have been on the firm side of expectations, though not strong enough to rule out a move. A pause in October would follow easing in September

October 21, 2025 12:55 PM UTC

As with recent Council meetings, what is important when the ECB gives its next (almost certain) stable verdict on Oct 30, is not what it says.  Instead, in particular, it is how much the impression is left that the easing window has not closed. The ECB is clearly split about whether policy has trou

Turkiye MPC Preview: CBRT will Likely Continue its Easing Cycle on October 23

October 20, 2025 7:00 AM UTC

Bottom Line: We think Central Bank of Turkiye (CBRT) will likely reduce the policy rate to 39%-39.5% during the MPC meeting scheduled for October 23 taking deceleration trend in inflation and relative TRY stability into account. We think CBRT will have to proceed carefully on interest-rate adjustmen

Looking at the Candidates for U.S. FOMC Chair

October 17, 2025 3:22 PM UTC

There are now five candidates for Fed Chair, in a rough order of decreasing credibility, current Fed Governor Christopher Waller, current Fed Governor Michelle Bowman, former Fed Governor Kevin Warsh,  National Economic Council Director Kevin Hassett, and Rick Rieder, Blackrock’s Chief Investment

October 17, 2025 10:24 AM UTC

The ECB is clearly split about whether policy has troughed or not, this mainly a result of differences within the Council as to where inflation risks lie.  Hawks perceive upside risks emerging while the dovish camp feels the opposite.  These divisions are likely to magnify when the ECB updates its

Preview: CBR will Likely Hold the Key Rate Stable at 17% on October 24

October 16, 2025 1:09 PM UTC

Bottom Line: We expect Central Bank of Russia (CBR) to hold the policy rate constant at 17% during the next MPC on October 24 since the pace of the fall in inflation decelerated in September due to heightened gasoline prices after Ukraine stepped up hitting oil refineries in Russia; which could also

UK GDP Review: Moving Sideways – At Best

October 16, 2025 6:39 AM UTC

Although the revisions up to July GDP data now confirm a small m/m fall for that month), this was unwound in the August numbers with a 0.1% rise (Figure 1). This put the less volatile three-month rate at 0.3% but we think this overstates what is very feeble momentum, which may actually be nearer zer

October 14, 2025 2:07 PM UTC

After the upside (and broad) June CPI surprise, CPI inflation rose further, up another 0.2 ppt to 3.8% in July, higher than the consensus but matching BoE thinking. Despite adverse rounding and fuel (and food) costs, the headline stayed there in the August figure, this foreshadowing a likely rise th

UK Labor Market: Continued Private Sector Job Losses Weighing More Clearly on Wages

October 14, 2025 9:22 AM UTC

There may be signs that the labor market is haemorrhaging jobs less clearly, if not actually indications that the more authoritative payrolls have stopped falling, albeit this largely due to increasing jobs within the health sector.  Indeed, private sector payrolls are still falling, down almost a