Rates on hold (again), no change likely this year Bank Negara Malaysia (BNM) today left its main policy rate unchanged at 3.0%, and once again made clear that it was in no rush to adjust its monetary policy settings anytime soon. The decision comes as no …
6th March 2025
Rebound in inflation this year means no further Riksbank cuts CPIF inflation rose in February to 2.9%, supporting our view that the Riksbank’s loosening cycle is over. CPIF inflation (2.9%) and CPIF inflation excluding energy (3.0%) were both stronger …
President Donald Trump's decision to grant a one-month exemption to the Big Three Automakers (Ford, GM & Stellantis) is something of a disappointment given the earlier heavy hints from his Commerce Secretary Howard Lutnick that more widespread relief was …
5th March 2025
Services sector holding up despite policy uncertainty After the slew of weaker activity and survey data in recent weeks, the small rise in the ISM services index in February should provide some reassurance that the floor is not falling from under the …
Fall in applications signals a weak Spring sales outlook The sharp fall in home purchase mortgage applications in February confirms that the rebound in mortgage rates late last year is suppressing home purchase demand. Recent declines in Treasury yields …
This page has been updated with additional analysis. Risks of deflation easing While we still think the SNB is most likely to err on the side of caution and cut its policy rate by a further 25bp on the 20 th March, higher than expected inflation in …
Little prospect of a reflationary rebound Chinese policymakers have stuck with an ambitious target for real GDP growth but have become more cautious on the outlook for nominal growth and inflation. And while they did deliver some increase in fiscal …
Weak productivity growth will tie the RBA’s hands Although activity picked up firmly in Q4, private demand remained relatively sluggish. Even so, with productivity growth dismal and unit labour cost growth accelerating, the RBA is unlikely to loosen …
Germany loosens the purse strings The announcement by Germany’s Chancellor-in-waiting, Friedrich Merz, that the parties which are likely to form the next government have agreed to substantially boost defence and infrastructure spending is a major policy …
4th March 2025
This page has been updated with additional analysis since first publication. Weak growth will push unemployment higher The euro-zone’s unemployment rate in January remained unchanged at its record low of 6.2% for a fourth consecutive month, but other data …
End-year rebound sets stage for stronger 2025 The 0.6% q/q rebound in South Africa’s economy in the final quarter of last year came on the back of an upwardly-revised 0.1% q/q contraction in Q3 and suggests that the recovery is back on track. We expect …
This page has been updated with additional analysis since first publication. Consumer rebound has further to run Today’s retail sales release should mollify the RBA’s concerns that the pickup in consumer spending last quarter may have been a one-off. …
RBA will only deliver shallow easing cycle The minutes of the RBA’s February meeting are consistent with our view that the Bank will continue to ease policy but won’t cut interest rates very far. It came as no surprise that the Board debated the decision …
Prices already surging ahead of tariffs The fall in the ISM manufacturing index in February likely marks the beginning of the end of the recent mini renaissance, as the reality of the disruption to the sector caused by tariffs (including retaliatory …
3rd March 2025
Services inflation finally starting to fall February’s decline in headline inflation was encouraging because it was partly due to lower services inflation. We expect the headline rate to remain above 2% throughout most of this year but services inflation …
Net lending to property has a steady start to the year Net lending to property had a steady start to 2025, with the total of £917mn in January down from £1.28bn in December 2024, but close to the average seen over 2024. The rise in net lending was …
This page has been updated with additional analysis since first publication. Households still in the mood to save rather than spend The stagnating economy is partly because households appear to be continuing to save rather than spend, which is unlikely to …
Small signs of improvement in Central Europe The rise in the manufacturing PMIs in Central Europe last month offers some hope that the region’s struggling industrial sector is pulling out of its slump. Elsewhere, Russia’s PMI suggests that overheating …
250bp rate cut this week on the cards The weaker-than-expected Turkish inflation figure for February, of 2.3% m/m, will provide some reassurance that the spike in January was a one-off. And it keeps the door open for the central bank to lower the one-week …
Policy support struggling to deliver sustained rebound The PMIs suggest that a combination of fiscal support and tariff front-running helped China’s economy regain some momentum in February. But growth still looks at risk of slowing this quarter, at …
Favourable base effects pull down core inflation The 0.28% m/m rise in core PCE prices in January was a big improvement on last year’s 0.5% m/m gain, but the 2.6% annual core inflation rate is still too hot for the Fed’s liking and, with inflationary …
28th February 2025
This page has been updated with additional analysis since first publication. Revisions leave economy in a much better place The 2.6% annualised gain in GDP last quarter was much stronger than the Bank of Canada’s forecast for a 1.8% increase and was …
Economy slowly emerging from soft patch GDP figures for Q4 2024 show that India’s economy remained fairly soft by its own standards at the end of last year. But with policy now decisively turning more supportive, economic growth should pick up further …
Euro-zone inflation drops back in February National data published so far suggest that euro-zone headline inflation dropped back in February, and that core inflation might have finally started to come down more significantly. (Euro-zone data due on Monday …
Rebound in domestic demand could slow pace of rate cuts The strong 1.7% q/q expansion in the Turkish economy in Q4 appears like a setback to the central bank’s efforts to bring down high inflation, but we don’t think this data is enough to throw the …
This page has been updated with additional analysis since first publication. Housing market maintaining momentum as the wider economy is losing it Some of the bigger-than-expected 0.4% m/m rise in Nationwide house prices in February (consensus and Capital …
Inflation on track to overshoot BoJ’s forecasts The January activity data suggest that GDP will have fallen this quarter, but that would follow strong gains in previous quarters. With inflation set to overshoot the Bank of Japan’s forecasts, we still …
Durable goods orders rebound thanks to strong Boeing orders The increase in durable goods orders in January was due to the volatile transport component, while core orders were unchanged. Although underlying capital goods shipments fell, business …
27th February 2025
ESIs point to stronger growth, higher inflation The European Commission's Economic Sentiment Indicators for Central and Eastern Europe (CEE) suggest that regional growth may hold up a little better than we had been expecting in Q1. That said, firms’ …
EC survey points to a weak economy but sticky inflation Surveys so far this year, including today’s EC survey for February, suggest the economy remains very weak while inflationary pressures are still somewhat elevated. While the ESI did increase in …
Harsh winter weather takes its toll on buyers The large fall in new home sales in January was to be expected given the disruption from the unseasonably severe winter weather. While sales should rebound this month, elevated mortgage rates will limit the …
26th February 2025
Softer price pressures pave the way for further rate cuts The smaller-than-expected increase in South Africa’s headline inflation rate, to 3.2% y/y, supports our view that the Reserve Bank can press ahead with its easing cycle over the coming months. The …
BoT to cut rates further over the coming year Thailand’s central bank (BoT) today cut interest rates by a further 25bps (to 2.00%), and we think more easing is likely before the end of the year. Today’s decision was predicted by just 10 out of the 26 …
This page has been updated with additional analysis since first publication. With price pressures remaining subdued, RBA can ease a bit further The relatively soft CPI print for January should ease some of the RBA’s concerns about the stickiness of …
Growth picks up, recovery to continue in 2025 Nigeria recorded a further pick-up in GDP growth to 3.8% y/y in Q4 of last year and, with inflation and interest rates set to fall sharply, we expect the recovery to continue over the coming quarters. The …
25th February 2025
House price growth unexpectedly reaccelerates The stronger 0.5% m/m rise in house prices in December suggests sellers still have the upper hand despite more homes coming onto the market and relatively weak buyer demand. This raises the risk that we have …
MNB on hold ... and probably for some time The Hungarian central bank (MNB) left its base rate on hold again today, at 6.50%, and we think that its easing cycle will remain on pause throughout 2025. That’s a more hawkish view than the latest consensus …
Inflation jumps, Copom to deliver more tightening The jump in Brazil’s headline inflation rate to 5.0% y/y in the first half of February means Copom will almost certainly press ahead with another 100bp hike in the Selic rate to, 14.25%, at its March …
Further interest rate cuts coming The Bank of Korea cut interest rates today by 25bps (to 2.75%) – the third cut in the past four meetings. The move was predicted by 35 out of 36 analysts polled by Reuters, including ourselves. The central bank will …
BoI leaves rates on hold, but getting closer to easing The communications accompanying the decision by the Bank of Israel (BoI) to leave its policy rate on hold again today, at 4.50%, were slightly less hawkish than at the previous meeting, and support …
24th February 2025
Odds shifting in favour of another 50bp cut The fall in core inflation in Mexico in the first half of February combined with weak economic activity, means that Banxico is likely to press ahead with another 50bp cut at its meeting next month. The outturn …
Polish economy starts 2025 on the front foot The stronger-than-expected activity data out of Poland for January suggest the economy has carried over some of the positive momentum from the end of last year. Alongside the recent strength of inflation, this …
Merz next chancellor but coalition composition unclear There was never any doubt that the centre right CDU would come out on top of the German federal election and that its leader Friedrich Merz would become the next German Chancellor . The first exit …
23rd February 2025
Weak start to 2025 a sign of things to come The fall in existing home sales in January reflects weak deal-making at the end of last year due to the surge in mortgage rates. Given that borrowing costs have stayed above 7% since then, we expect this …
21st February 2025
GST holiday temporarily boosts sales The jump in retail sales in December was partly due to the GST holiday, but also reflected strong gains in sectors that were unaffected by tax changes. Nonetheless, with sales dropping back in January, this release …
This page has been updated with additional analysis since first publication. PMIs point to businesses cutting employment to cope with higher taxes. The composite activity PMI was unchanged in February, which is consistent with the economy moving sideways …
Economy unlikely to have picked up in Q1 February’s Flash Composite PMI provides more evidence that, after expanding by only 0.1% in Q4, the euro-zone economy remains all but stagnant in Q1. The euro-zone Composite PMI was unchanged in February at 50.2, a …
This page has been updated with additional analysis since first publication. Bad news continues for the Chancellor While January’s disappointing public finances figures may not be as bad as they first appear, they continue the run of bad news for the …
This page has been updated with additional analysis since first publication. Supermarkets win, restaurants lose The leap in retail sales volumes in January shows that the retail sector shot out of the blocks at the start of the year. But some of that …
This page has been updated with additional analysis since first publication. PMIs point to further rate hikes The further rebound in the composite PMI in February coupled with the persistent strength in manufacturing output prices suggests that the Bank …
