Global Economics Update What to make of flattening yield curves Yield curves are their flattest since 2007/08 in a few advanced economies, a development commonly viewed as signalling an economic downturn. However, it’s unlikely that we are headed for a global... 13th July 2018 · 1 min read
Global Economics Update Could Trump withdraw from the WTO? President Donald Trump would probably struggle to pull the US out of the WTO on his own. But unless Congress starts taking a tougher stance against his protectionist urges, the continued use of... 11th July 2018 · 1 min read
Global Economics Update Monetary Indicators Monitor (Jul.) Global monetary and credit conditions should remain supportive of GDP growth in the near term, even though the stock of assets purchased under “global” QE programmes is close to peaking. 11th July 2018 · 1 min read
Global Economics Update The damage from a global trade war Assessing the damage from a global trade war is tricky because there are few historical precedents and the costs would depend on the nature of the conflict. But our best guess is that, if all... 9th July 2018 · 1 min read
Global Economics Update US-China tariffs may shift import demand to other EMs The tariffs imposed by China and the US on $34bn of each other’s imports – that will come into force on Friday – are likely to have a small, negative impact on most of the emerging world. But some EMs... 3rd July 2018 · 1 min read
Global Economics Update Surveys point to rebound in Q2, despite trade jitters Markit’s global manufacturing PMI slipped at the end of Q2 but remains consistent with a rebound in world GDP growth. We think that the latter picked up to over 3½% annualised last quarter. 2nd July 2018 · 1 min read
Global Economics Update How hard could car tariffs hit the euro-zone? President Trump’s threat to retaliate to EU tariffs with a 20% tax on EU car exports sounds alarming. In fact, the direct effect on the euro-zone would be smaller than you might think, perhaps... 26th June 2018 · 1 min read
Global Economics Update Advanced economies entering Q3 with momentum Business surveys for June, which were published by Markit today, reinforce our view that GDP growth in advanced economies rebounded in the second quarter. 22nd June 2018 · 1 min read
Global Economics Update Wage growth generally still subdued Given the strength of their labour markets, wage inflation is likely to pick up a bit in the US, UK and, to a lesser extent, the euro-zone and Japan over the coming quarters. But as Jerome Powell... 20th June 2018 · 1 min read
Global Economics Update Fed signals a step-up in the pace of tightening The Fed delivered another 25bp hike in its fed funds target range to between 1.75% and 2.00% today and the updated interest rate projections show that officials now anticipate an additional two 25bp... 13th June 2018 · 1 min read
Global Economics Update Assessing the impact of an “all-out” trade war Our best guess is that even if all the protectionist threats made to date were carried out, they would subtract a lot less than half a percent from global GDP. A free-for-all, in which all governments... 13th June 2018 · 1 min read
Global Economics Update Five questions (and answers) on Trump-Kim summit Today’s historic summit between Donald Trump and Kim Jong Un represents an extraordinary turn of events, and comes just a year after it appeared North Korea could be heading for a devastating war with... 12th June 2018 · 1 min read
Global Economics Update Will surging interest rates sink the US economy? We expect rising interest rates to cause economic growth to slow sharply next year, especially as the boost from fiscal stimulus fades. Our best judgement is that there’s a 30% chance of a mild... 12th June 2018 · 1 min read
Global Economics Update Monetary Indicators Monitor (Jun.) Despite the recent sell-off in peripheral European bond markets, we still expect the Fed to raise rates again tomorrow and the ECB to announce at its meeting on Thursday its plans to bring its asset... 12th June 2018 · 1 min read
Global Economics Update Irish border issue looks set to tie Government’s hands The EU has shunned the Government’s backstop proposal for the whole of the UK to remain in the EU’s customs territory at the end of the transition period. It seems to us that this forces the... 8th June 2018 · 1 min read
Global Economics Update Household balance sheets still in decent shape Although there are early signs that the finances of US households are coming under a bit of pressure as interest rates rise, the near-term outlook for household consumption in advanced economies... 8th June 2018 · 1 min read
