Warsh, AI and Lower Policy Rate?

February 16, 2026 10:55 AM UTC

·       Warsh will find it tricky to convince FOMC members that AI is currently boosting productivity and acting as a disinflationary force.  However, Warsh could also try to get the Fed to be more forward looking and less data dependent, which could add some proactivity into Fed debates. Fo

VAT Hike, Stubborn Food and Services Prices Pushed Russia’s Inflation to 6.0% y/y in January

February 13, 2026 5:08 PM UTC

Bottom Line: After easing to 5.6% y/y in December, Russia’s inflation edged up to 6.0% y/y in January due to VAT hike and stubborn food and services prices, the State Statistics Service (Rosstat) said. Despite Central Bank of Russia (CBR) announced that the inflation forecast for 2026 has been

U.S. January CPI - Yr/yr ex food and energy pace slowest since March 2021

February 13, 2026 2:18 PM UTC

January CPI is slightly lower than expected at 0.2% overall though the ex food and energy rate at 0.3% is on consensus, with the core rate almost spot on 0.3% even before rounding. Given a strong year ago rise, yr/yr growth slowed, overall to 2.4% from 2.7% and the core to 2.5% from 2.6%, the latter

Surprising Move by the CBR: 50 Bps Interest Rate Cut Despite Inflationary Risks

February 13, 2026 12:48 PM UTC

Bottom Line: Despite we expected the Central Bank of Russia (CBR) to hold the policy rate at 16% during the MPC on February 13 and anticipated a cautious stance as the Bank monitors inflationary risks, including the VAT hike in 2026, utility tariff increases, and elevated inflation expectations; the

Preview: Due February 20 - U.S. Q4 GDP - GDP and Core PCE Prices both seen at 2.6%

February 12, 2026 4:48 PM UTC

We expect a 2.6% annualized increase in Q4 GDP, well above a flat forecast we had entering the quarter, but off a peak estimate of 3.6%, with weaker November trade and December retail sales data having trimmed the forecast. December trade data, due on February 19, remains a significant source of unc

Preview: Due February 13 - U.S. January CPI - A stronger month but slower yr/yr

February 12, 2026 1:13 PM UTC

We expect a 0.2% increase in January’s CPI, with a 0.3% rise ex food and energy, though risks are to the upside with our forecasts before rounding being for gains of 0.24% overall and 0.34% ex food and energy. The latter would be the strongest since August. 

Cuba: Pressure Grows

February 12, 2026 8:05 AM UTC

·       The Donroe doctrine has pressured Mexico into halting oil exports to Cuba, which is intensifying pressure on Cuba’s regime.  While chaos and attempted mass immigration is a risk, the baseline is for a negotiated deal as U.S./Cuba discussions deepen – though with the added complex

UK GDP Review: Underlying Economy Fragility Does Continue

February 12, 2026 7:52 AM UTC

First the good news; the UK economy grew for a second successive month in December, something not seen for almost a year.  But as is familiar with recent UK real economy data, there is a negative flip side with the 0.1 m/m December advance negated by downward revisions to previous figures (November

Bank of Canada Minutes from January 28 - Steady policy dependent on economy evolving as expected

February 11, 2026 7:06 PM UTC

The Bank of Canada has released minutes from its January 28 meeting which provide no major surprises. The meeting saw rates left unchanged at 2.25% but noted heightened uncertainty, which the minutes also emphasize, with steady policy conditional on the economy evolving as expected.

U.S. January Employment - Stronger across the board, will keep Fed in no hurry to ease

February 11, 2026 2:21 PM UTC

January’s non-non-farm payroll at 130k is significantly stronger than expected and even more so in the private sector at 172k. An above trend 0.4% rise in average hourly earnings, a rise in the workweek to 34.3 from 34.2 hours and a fall in unemployment to 4.3% from 4.4% leave the data as stronger

UK Gilt Vigilantes and Politics

February 11, 2026 9:05 AM UTC

•    The Gilt market is sensitive to the prospect that Starmer/Reeves could be replaced, resulting in some changes to the fiscal rules in the scanario of a new PM/Chancellor.  Further fiscal rule refinement could be possible, but a new PM would want a political reset and this would likely pre

February 10, 2026 2:30 PM UTC

We expect January’s non-farm payroll to rise by 85k overall and by 80k in the private sector, which would be on the firm side of trend and could be even more so after what could be substantial negative historical revisions. However, we expect unemployment to rise to 4.5% from 4.4%. We expect avera

U.S. December Retail Sales and Q4 Employment Cost Index show fading momentum

February 10, 2026 2:03 PM UTC

December retail sales are weaker than expected, unchanged overall, ex autos and ex autos and gasoline. This could be a sign of consumer spending losing momentum in response to real disposable income coming in near flat in both Q3 and probably Q4, given limited employment growth and resilient inflati

UK CPI Preview (Feb18): Fresh and Marked Fall to Resume as Core to Hit New Cycle-Low?

February 10, 2026 11:35 AM UTC

UK policy makers may not be able to say they have won the war against inflation, but a clear victory may be seen in the batter likely in the next few months with a likely return to the 2% target by April These projected falls are likely to commence with the looming January numbers (Figure 1) where a

Preview: Due February 10 - U.S. December Retail Sales - Maintaining momentum

February 9, 2026 2:18 PM UTC

We expect retail sales to maintain momentum in December, rising by 0.6% overall and by 0.5% ex auto, both matching their November increases. Ex autos and gasoline we expect a 0.5% increase, a modest pick-up from two straight gains of 0.4%.

Russian Economy Grew by 1% in 2025

February 6, 2026 6:25 PM UTC

Bottom Line: According to official announcement, Russian economy grew by 1.0% in 2025. President Putin said this slowdown was expected and intentional as part of measures aimed at curbing inflation. We think Central Bank of Russia’s (CBR) previous aggressive monetary tightening coupled with sancti

Mexico: March Pause Rather Than Cut?

February 6, 2026 7:52 AM UTC

Banxico paused as expected, but revised the peak in inflation to 4% from 3.7% and pushed back the forecast of when inflation is expected to hit the target. Though the economy is still expected to be below trend in 2026, the inflation/growth tradeoff is causing Banxico members to debate whether furth

ECB: Papering Over the Cracks

February 5, 2026 2:51 PM UTC

·       As widely expected the ECB kept the policy rate unchanged at the February meeting.  The broad message remains that the ECB Council is comfortable with current policy rates, which provides short-term forward guidance of no change in rates.  This message came from the ECB statement an

BOE March Cut and Then More

February 5, 2026 1:25 PM UTC

·       Six members of the MPC appear worried about the disinflationary impact from a weak economy and four of whom actually voted for a 25bps cut at the February meeting.  BOE Bailey and Mann, looking at the MPC minutes, are very close to voting for a rate cut, which suggests high confidenc

UK GDP Preview (Feb 12): Underlying Economy Fragility Continues?

February 5, 2026 11:21 AM UTC

Even given the surprisingly solid November GDP release, this merely returns the level of GDP to where it was in June, albeit briefly as for the latter.  Partly undermined by wet and warm weather through the month, we see no change on the December figure, in m/m terms (Figure 1), thus no reversal of

CBR will Likely Keep the Key Rate Stable on February 13

February 5, 2026 9:07 AM UTC

Bottom Line: Following the Central Bank of Russia’s (CBR) 50 bps cut to 16% on December 19—driven by an accelerated disinflationary trend in Q4—we expect the CBR to hold the policy rate at 16% on February 13. This cautious stance is anticipated as the Bank monitors inflationary risks, includin

Preview: Due February 13 (revised date) - U.S. January CPI - A stronger month but slower yr/yr

February 4, 2026 6:31 PM UTC

We expect a 0.2% increase in January’s CPI, with a 0.3% rise ex food and energy, though risks are to the upside with our forecasts before rounding being for gains of 0.24% overall and 0.34% ex food and energy. The latter would be the strongest since August.

February 4, 2026 5:46 PM UTC

We expect January’s non-farm payroll to rise by 85k overall and by 80k in the private sector, which would be on the firm side of trend and could be even more so after what could be substantial negative historical revisions. However, we expect unemployment to rise to 4.5% from 4.4%. We expect avera

Preview: Due February 10 - U.S. December Retail Sales - Maintaining momentum

February 4, 2026 5:15 PM UTC

We expect retail sales to maintain momentum in December, rising by 0.6% overall and by 0.5% ex auto, both matching their November increases. Ex autos and gasoline we expect a 0.5% increase, a modest pick-up from two straight gains of 0.4%.

U.S. Inflows: Portfolio Dominates

February 4, 2026 12:05 PM UTC

·        Portfolio flows have dominated U.S. C/A financing looking at the breakdown of the balance of payment data (BOP), with no material slowdown in 2025 from foreign investors. U.S. investors did accelerate buying of overseas equities but this was counterbalanced by slower U.S. buying of

EZ HICP Review: Services Inflation Less Resilient as Core Hits Cycle-Low

February 4, 2026 11:19 AM UTC

Having been range bound for some 5-6 months between 2.0% and 2.2% until November but after a fall to 1.9% in December headline HICP inflation dropped to 1.7% in the flash January data, thereby matching expectations and the short-lived Sep 24 outcome.  The drop came in spite of higher food inflation

Turkiye Inflation Review: Inflation Softened to 30.7% in January

February 3, 2026 11:12 AM UTC

Bottom line:  Turkish Statistical Institute (TUIK) announced January inflation on February 3. Turkiye’s annual inflation edged down moderately to 30.5% in January while food, housing and education prices drove the surge. Our average inflation forecast stand at 26.5% for 2026 since inflation expec

Europe Nuclear Weapons; NATO and Greenland

February 3, 2026 11:05 AM UTC

·        Without the U.S. nuclear weapon umbrella, Europe’s nuclear deterrent is too weak. Secondly, European countries are highly reliant on U.S. missile defense, command, intelligence and reconnaissance, which military experts estimate could take 10 years to replace. Major European count

Preview: Due February 11 (government shutdown may delay) - U.S. January CPI - A stronger month but slower yr/yr

February 2, 2026 7:20 PM UTC

We expect a 0.2% increase in January’s CPI, with a 0.3% rise ex food and energy, though risks are to the upside with our forecasts before rounding being for gains of 0.24% overall and 0.34% ex food and energy. The latter would be the strongest since August.

EZ HICP Preview (Feb 4): Services Inflation Less Resilient as Headline to Slip Further

February 2, 2026 12:07 PM UTC

HICP inflation had been range bound for some 5-6 months between 2.0% and 2.2% with the November and October numbers in the middle of that range. And it seemingly stayed in that range falling to 2.0% in the December flash numbers, only to be revised down a further notch to 1.9% in the final HICP figu

Markets: Profit-Taking or More?

February 2, 2026 9:22 AM UTC

•    For now we see some further profit-taking on risky positions in gold/silver/copper/equities and short USD positions.  However, a bigger macro catalyst is required to produce a deep correction in equities and major risk off.  The nomination of Kevin Warsh for Fed chair is unlikely to be

Kevin Warsh Nominated for U.S. FOMC Chair

January 30, 2026 4:13 PM UTC

In October we ranked the five candidates for Fed Chair, putting Trump’s choice, Former Governor Kevin Warsh, in third place, behind current Governors Waller and Bowman but ahead of outsiders Hassett and Rieder. A muted market reaction suggests the market is neither elated nor dejected by the decis

ECB Preview: After GDP and Before Feb Meeting

January 30, 2026 10:05 AM UTC

·       Most on the ECB council appear to be comfortable with steady policy in H1 2026, after a cumulative 200bps of cuts.  This will likely be the overall message from the February 5 ECB meeting. This will paper over differences for 2027 among ECB council members. However, we agree with the

BOE Preview: Clues From February 5

January 30, 2026 8:05 AM UTC

·       No change is expected at the Feb 5 BOE meeting, with communications leaving the door open to further interest rate cuts at a slower pace than 2025. However, we still forecast three 25bps cuts in 2026 to 3.00%, with the first likely arriving at the key April 30 meeting. The UK labor ma

As We Expected, SARB Kept the Key Rate Stable at 6.75%

January 30, 2026 6:31 AM UTC

Bottom Line: South African Reserve Bank (SARB) kept the policy rate unchanged at 6.75% during the MPC on January 29 due to inflationary risks such as food prices and rise in administered costs, such as electricity prices. The MPC decision was not unanimous. We think the SARB’s (new) 3% inflation t

U.S. Q4 GDP now seen at 3.1% rather than 3.6% after wider November trade deficit

January 29, 2026 6:58 PM UTC

Following today’s wider trade deficit for October, the Atlanta Fed has revised its Q4 GDP estimate down to 4.24% from 5.4%. We have revised our estimate to 3.1% from 3.6%. We are assuming a December deficit only marginally narrower than November’s, and significantly wider than October’s. 

January 29, 2026 4:23 PM UTC

We expect January’s non-farm payroll to rise by 85k overall and by 80k in the private sector, which would be on the firm side of trend and could be even more so after what could be substantial negative historical revisions. However, we expect unemployment to rise to 4.5% from 4.4%. We expect avera

Sweden Riksbank Review: Stable Policy Rates for 2026

January 29, 2026 9:09 AM UTC

·       Once again the Riksbank kept policy on hold with the key policy rate left at 1.75%.  The Riksbank Board remains pleased with the data flow since its last rate cut on Sep 23, though vigilant on both sides.  The Board promise of no change for some time to come was repeated, though we

Brazil: March 50bps Cut?

January 29, 2026 7:22 AM UTC

Though the BCB remain focused on getting inflation converging towards the centre of the inflation target range at 3%, the January statement does suggest that an easing move will be delivered at the March meeting. With headline inflation falling, the real interest rate is going up and policy is becom

FOMC Pauses With Risks Seen Diminished

January 28, 2026 8:33 PM UTC

The FOMC has left rates unchanged at 3.5-3.75% as expected, with two dissents for a 25bps easing. The statement takes a slightly more optimistic view of the economy than the last one in December. We continue to expect two 25bps easings this year, coming in June and September.

FOMC leaves rates unchanged, more positive on economy, two dovish dissents

January 28, 2026 7:20 PM UTC

The FOMC has left rates unchanged at 3.5-3.75% as expected, with two dissents for a 25bps easing, from Miran, as was widely expected, and Waller, which was less so. The statement takes a slightly more optimistic view of the economy than the last one in December.

Bank of Canada - Rate Level Still Appropriate But Uncertainty Heightened

January 28, 2026 4:42 PM UTC

The Bank of Canada left rates unchanged at 2.25% as expected and continues to see the current policy rate as appropriate, Governor Macklem stating updated economic forecasts have not changed significantly since October. However in highlighting heightened uncertainty the statement appears to leave ri

Russia GDP Growth Preview: 2025 GDP Growth Will Hit Around 1%

January 28, 2026 11:09 AM UTC

Bottom Line: After Russia's GDP expanded by a moderate 0.6% y/y in Q3, we expect Russian economy will grow by around 1.0% in 2025 as Q4 growth will likely hit 0.6%-0.7% y/y. The GDP growth figures are expected to be announced on February 6. We think Central Bank of Russia’s (CBR) previous aggressi

Trump’s Problems

January 28, 2026 8:35 AM UTC

Overall, the Trump administration’s hyperactive start to 2026 is unlikely to achieve success on the number one issue for voters in the shape of cost of living concerns.  Meanwhile ICE’s immigration tactics in Minnesota are causing concerns among swing voters, though Trump geopolitical adventuri

Turkiye Inflation Preview: Inflation will Likely Soften to Around 30.5% in January

January 27, 2026 5:10 PM UTC

Bottom line: After hitting 30.9% annually in December, we expect Turkiye’s inflation will likely soften moderately to around 30.5% in January despite some noise is expected in next two months' readings as upside-tilted inflation risks will continue to limit the downward trend during the ongoing

U.S. Q4 GDP now seen at 3.6% supported by consumer spending and net exports

January 26, 2026 5:38 PM UTC

It now looks clear that Q4 GDP is going to be significantly stronger than the flat outcome we expected in the quarterly outlook, with our calculation now at 3.6% annualized. Domestic demand appears to have maintained momentum with the main uncertainty being to what extent the trade balance can susta

FOMC Preview for January 28: No change with early 2026 data awaited

January 22, 2026 6:42 PM UTC

The FOMC meets on January 28 and rates look set to be left at 3.5-3.75%, and while rates are likely to move lower in 2026, they are unlikely to give many hints over what is likely in March, with future decisions dependent on data. The FOMC will not update its economic forecasts or dots at this meeti

Due to Risks, CBRT Continued Easing Cycle with 100 Bps Cut on January 22

January 22, 2026 12:52 PM UTC

Bottom Line: As we expected, Central Bank of Turkiye (CBRT) reduced the policy rate to 37% during the MPC meeting on January 22, indicating a cautious progress since a slower rate cut than December. With the bank committed to disinflation towards its 5% target, CBRT will likely proceed carefully on