Japan Economics Update End of Yield Curve Control won’t spell fiscal disaster The abandonment of Yield Curve Control would probably prompt the Bank of Japan to reduce its bloated holdings of government bonds, which could push up long-term bond yields. However, there are good... 25th September 2023 · 4 mins read
Global Economics Update PMIs consistent with interest rate peaks The September Flash PMIs add to evidence that economic activity in the US and Europe is weakening. This supports our view that the Fed, ECB, and Bank of England have finished hiking interest rates. 22nd September 2023 · 3 mins read
Global Markets Update Why the 10-year Treasury yield could yet fall back significantly Although the 10-year Treasury yield rose further to a post-Global-Financial-Crisis high of ~4.5% in the wake of this week’s FOMC meeting, we continue to forecast that it will drop back to 3.75% by the... 22nd September 2023 · 4 mins read
UK Economics Weekly Electoral cycle to keep rates high, but deepen cuts in 2025 A loosening in fiscal policy next year ahead of a possible election in late 2024 is another reason to think that the Bank of England will keep rates at their current level of 5.25% until late in 2024... 22nd September 2023 · 6 mins read
US Economics Weekly Hawkish Fed at odds with the data The new projections published by the Fed this week signalled that officials are fully onboard with the idea of interest rates staying ‘higher for longer’, but that is based on forecasts for real... 22nd September 2023 · 6 mins read
Global Economics Update Key questions after the latest central bank meetings We held a Drop-In yesterday to discuss the latest policy meetings of the Fed, ECB, and Bank of England and what they might mean for the future path of policy and financial markets. (See the recording... 22nd September 2023 · 7 mins read
Europe Rapid Response Euro-zone Flash PMIs (Sep.) The small increase in the euro-zone Composite PMI in September left it still in contractionary territory. We think a further contraction in activity lies ahead in the remainder of this year. 22nd September 2023 · 2 mins read
Japan Economics Weekly Government benefitting from higher inflation for now We previously argued that political pressure is one reason to expect the Bank of Japan to tighten policy. However, we suspect the government's stance on inflation has become more ambiguous. While... 22nd September 2023 · 7 mins read
Japan Economics Update Bank of Japan will call time on loose policy next year The Bank of Japan still sounded dovish when it kept policy settings unchanged today. But with inflation proving stickier than expected, we expect the Bank to lift its policy rate in January and have... 22nd September 2023 · 3 mins read
UK Economics Rapid Response UK S&P Global/CIPS Flash PMIs (Sep. 2023) The fall in the activity PMI further below the boom-bust level of 50.0 in September suggests the economy may already be in recession. And with weaker activity weighing more heavily on price pressures... 22nd September 2023 · 3 mins read
UK Economics Rapid Response UK Retail Sales (Aug. 2023) The 0.4% m/m rebound in retail sales volumes in August isn’t as good as it looks as it partly reflected a pickup in sales after the unusually wet weather in July. And while the worst of the falls in... 22nd September 2023 · 3 mins read
Australia & New Zealand Economic Outlook Downturn will prompt policy easing next year Both economies have dodged a recession so far, but we still consider it more likely than not that output will shrink across the second half of the year. With inflation softening and labour markets... 22nd September 2023 · 20 mins read
Asset Allocation Update What rate hikes in Japan could mean for global markets We now expect the Bank of Japan to hike its policy rate – for the first time in sixteen years – next January. While we think global markets are generally braced for such an event, there’s a clear risk... 22nd September 2023 · 5 mins read
Australia & New Zealand Economics Weekly Higher energy inflation won’t prompt further rate hikes The recent jump in crude oil prices will lift headline inflation in Australia, but we doubt it will have much bearing on underlying inflation. Accordingly, we still think that the RBA's next move will... 22nd September 2023 · 6 mins read
