US Economics Weekly Fed to pivot in H1 next year The Fed is almost certain to hike its policy rate by 25bp to between 5.25% and 5.50% at next week’s FOMC meeting, but we increasingly believe that will prove to be the peak. Despite the ‘higher for... 21st July 2023 · 8 mins read
UK Economics Weekly BoE last to halt hikes and last to cut We think UK core inflation will ease to 2% by the end of 2024 as the effects of the rises in interest rates are felt. But the UK’s more persistent labour supply shortfall than elsewhere suggests this... 21st July 2023 · 5 mins read
Global Markets Update The US yield curve could stay inverted for a while yet The Treasury yield curve has been inverted for a long time by past standards, but we think it could remain so until next year even if there’s a recession in the interim. 21st July 2023 · 4 mins read
Japan Rapid Response Japan Flash PMIs (Jul. 2023) July’s flash PMI readings suggest manufacturers continue to struggle while the services sector remains resilient. And while manufacturing output prices inched up, the sizeable fall since the high last... 21st July 2023 · 3 mins read
UK Economics Rapid Response UK Public Finances (Jun. 2023) June’s public finances figures revealed an unexpected undershoot of the OBR’s forecast for public borrowing, bringing some cheer for the government on a day when it has lost two by-elections. But with... 21st July 2023 · 3 mins read
UK Economics Rapid Response UK Retail Sales (Jun. 2023) The further increase in retail sales volumes in June suggests the recent resilience in economic activity hasn’t yet faded. But our view that interest rates will rise further, from 5.00% now to a peak... 21st July 2023 · 3 mins read
Australia & New Zealand Economics Weekly New Zealand inflation will remain higher for longer The fall in New Zealand’s headline inflation rate in Q2 largely reflected base effects, with underlying price pressures remaining strong. Accordingly, we think inflation will return to the RBNZ’s... 21st July 2023 · 6 mins read
Japan Economics Weekly Budget deficit will be larger than we had thought While the ratio of tax revenue to GDP last year was the highest it has been since the 1980s, growth in tax revenue has been weaker in recent months than we had anticipated despite strong growth in the... 21st July 2023 · 4 mins read
Bank of Japan Watch Yield Curve Control won’t be tweaked At the upcoming meeting, the Bank of Japan will revise up its inflation forecasts amid early signs of stronger wage pressures. While that could open the door for a further widening of the tolerance... 21st July 2023 · 9 mins read
Capital Daily The US stock market’s been flying high, but has it earned it? As the second quarter US reporting season gets into full swing, it’s easy to lose sight of the big picture: the peak-to-trough drawdown in earnings per share (EPS) from last year has not only been... 20th July 2023 · 4 mins read
US Housing Market Rapid Response Existing Home Sales (Jun.) Existing home sales edged lower, dropping by 3.3% m/m to 4,160,000 annualised in June. That decline takes sales back towards the low of 4.0m recorded in January. And despite a marginal pickup in... 20th July 2023 · 1 min read
Australia & New Zealand Rapid Response Australia Labour Market (Jun. 2023) With the labour market still running red hot, we think the Reserve Bank of Australia has more work to do. Accordingly, we’re sticking with our forecast that the RBA will lift its cash rate to 4.60% by... 20th July 2023 · 2 mins read
Global Markets Update Why Gilt yields and sterling may have further to fall Despite today’s big reaction in markets in the UK to better-than-expected inflation news, we still think investors are overestimating the peak in interest rates there and underestimating how much... 19th July 2023 · 5 mins read
US Fed Watch One last hurrah for the hawks Fed officials appear set on another 25bp rate hike at next week’s FOMC meeting, which would take the fed funds rate to a 22-year high of 5.25%-5.50%. But a run of softer inflation readings over the... 19th July 2023 · 9 mins read
US Housing Market Rapid Response Housing Starts (Jun.) Single-family starts fell back from their 11-month high in June, but remained substantially above the average seen in 2023 thus far as homebuilders remained optimistic. However with mortgage rates... 19th July 2023 · 2 mins read
