Trump’s strange threat President-elect Trump’s warning to the EU to “…make up [its] tremendous deficit with the United States by the large scale purchase of our oil and gas. Otherwise, it is TARIFFS all the way!!!” will not cause sleepless nights in …
20th December 2024
Nigeria: more rate hikes not a done deal Nigeria’s headline inflation rate crept up further in November, but we’re not convinced that this will prompt the central bank to deliver more rate hikes. Figures released on Monday showed that Nigeria’s headline …
Markets don’t believe easing will deliver China’s central bank is trapped between the leadership’s incompatible desires to ramp-up monetary support for the economy, while keeping the currency stable and at the same time sending a message that its policy …
Germany took a further step towards early elections this week as Chancellor Olaf Scholz intentionally lost a confidence vote in parliament as expected. Most political parties also published their manifestos. The main economic proposals of the CDU , which …
When matters less than how far Governor Ueda delivered two messages in the press conference after yesterday’s policy meeting : first, the Bank of Japan thinks that policy normalisation is still on track and it intends to raise rates further; second, the …
RBA shake up The week began with Australian Treasurer Jim Chalmers announcing two new picks for the RBA’s monetary policy committee. To recap, in late November, parliament approved an overhaul of the RBA, in line with the recommendations of a review …
Dovish BoK minutes point to further rate cuts This week’s publication of the minutes from the Bank of Korea’s November meeting , at which it cut rates for a second month in a row, confirmed that inflation concerns have now largely subsided and that the …
Better data at the end of the year India’s economy is ending 2024 looking a little healthier than it had been. The flash editions of the manufacturing and the services PMIs both rose in the December readings that were published this week. (See Chart 1.) …
Saudi inflation to fall back over 2025 Saudi inflation rose further in November but there were tentative signs that some of the recent drivers of higher price pressures are fading and we expect the headline rate to drop back towards 1% by end-2025. The …
19th December 2024
Halfway through the December round of central bank policy announcements the US dollar remains on the front foot, with the DXY index again close to its post-2022 high. Arguably, the dollar’s strength this week mainly reflects continued disappointing news …
13th December 2024
Winner and losers from Assad’s downfall The fall of Syria’s President Bashar al-Assad last weekend is a monumental development after a period of 54 years in which his family had ruled the country. While there is still a high level of uncertainty over the …
Fed presented with early Christmas gift Going into this week, it already looked likely that the Fed would cut its policy rate by 25bp at its December meeting (as opposed to leaving it unchanged), and the muted November price data cemented it. Based on the …
Milei has reason to cheer Tuesday marked Argentinian President Javier Milei’s first year in office, and he had plenty to celebrate. He’s made much more progress than we (and most other analysts) had thought would be possible. Inflation came in at 2.4% m/m …
South Africa October activity data point to recovery While data out this week showed renewed struggles in South Africa’s mining sector, other figures suggest that a recovery has taken hold in Q4. The retail sector recorded a 1.6% m/m gain in October, more …
Bank of Canada signals caution The Bank continued its easing cycle this week with another 50bp cut, taking the policy rate down to 3.25%. While that was widely expected, the hawkish tone of the policy statement prompted investors to pare back expectations …
We’ll be discussing the outlook for Bank of England, ECB and Fed policy in a 20-minute online briefing at 3pm GMT on Thursday 19th December. (Register here .) At the start of this year we thought that GDP growth would gather momentum throughout the year. …
Cyclical rebound in oil demand will be short lived Energy import growth was an unexpected bright spot in the preliminary Chinese trade data, as imports of crude oil rebounded by 14.3% y/y, after contracting for seven of the last eight months. That comes …
Mood at the ECB shifting gradually In our view, this week’s ECB meeting didn’t spring any surprises, and the message was clear that we should expect further interest rate cuts. (See here .) Yet the market reaction during and after the press conference …
Deflation concerns to sway BoT After a relatively quiet week in terms of scheduled events and releases, the coming week sees central bank meetings in Pakistan, Thailand, Indonesia, Taiwan and the Philippines. We are expecting holds in Indonesia and …
New RBI leadership and inflation drop tips balance Two big developments this week have tipped the odds in favour of a repo rate cut at the RBI’s next meeting in February, or potentially even in an unscheduled meeting before then. The first was the …
B ut a dramatic shift in policy approach still unlikely The Central Economic Work Conference (CEWC), an annual gathering at which China’s leadership discusses targets and priorities for the following year, concluded yesterday. We discussed the key …
Tankan adds to case for December hike Q3 private consumption revised down Real GDP growth for the third quarter was revised up to 0.3% q/q from 0.2% in the second estimate released on Monday. However, private consumption was revised down from a 0.9% q/q …
Tight labour market will muddy the waters Although the Reserve Bank of Australia predictably left rates on hold at its meeting on Tuesday, the Board didn’t exactly try to hide the fact that it was in a more dovish mood. Indeed, the Bank stated that it was …
OPEC+ alters Gulf’s economic outlook Following our previous Weekly , OPEC+ announced that it would be pushing back the start date of when it will unwind oil production cuts to April 2025 and that the pace of increase will be slower than we had previously …
12th December 2024
Despite a small rebound in the wake of another solid non-farm payrolls release , the US dollar is broadly unchanged on the week as the recent consolidation phase in currency markets continues. Neither another tariff threat from president-elect Trump (this …
6th December 2024
Pick-up in the survey indicators Recent Bank of Canada communications have been keenly attuned to the downside risks to inflation and economic activity, concerns which seemed justified after last week’s disappointing GDP report, which showed third-quarter …
Cut or skip? This week, Governor Christopher Waller signaled support for continuing the loosening cycle, but noted he could favour a pause this month if “our forecasts of slowing inflation and a moderating but still-solid economy are wrong”. While that …
Another twist in Romania’s election rollercoaster Romania’s constitutional court unexpectedly announced today that it will annul the first round of the presidential election , which took place on 24 th November and saw independent far-right candidate, C …
Brazil’s overheating eroding bumper trade surplus Brazil’s Q3 GDP figures released this week showed that the economy is overheating and unbalanced. Consumption and investment growth accelerated compared with Q2. Headline GDP growth was only weaker than …
The end of Michel Barnier’s administration after just three months on Wednesday was something of an anticlimax for bond markets as it had already been discounted by investors. Spreads on French bonds have actually narrowed this week. There remains a lot …
South Africa GDP miss to be followed by rebound The 0.3% q/q fall in South Africa’s GDP in Q3 was disappointing, but it was largely driven by a slump in agriculture that should unwind. Along with low inflation and continued monetary easing, we expect the …
The government’s new “mission” to deliver “higher living standards…through higher real household disposable income (RHDI) per person and GDP per capita by the end of the parliament” is not ambitious. Real GDP per capita has grown by 1.9% a year on average …
Prolonged crisis would weigh on the economy The easiest way out of the political crisis that Korea finds itself in would be for President Yoon Suk Yeol to resign. A resignation would trigger a presidential election within 60 days. Given the extent of …
The decision by OPEC+ to delay unwinding some of its oil production cuts until April 2025 appears to have provided food for thought to both oil bulls and bears. In fact, oil prices yo-yoed as news on the decision trickled in, before falling a touch to …
Rupee at record low belies exchange rate stability On the face of it, the recent moves in financial markets pose a dilemma for the Reserve Bank’s MPC, which earlier today voted to keep the repo rate unchanged at 6.50%. (See here for our initial response …
New rules are more restrictive but leave loopholes The updated US semiconductor export controls published on Monday will further limit China’s ability to manufacture advanced semiconductor chips. The 200+ pages of legislation contain many intricacies, but …
December still on After a news report on Wednesday poured cold water on the prospect of a rate hike at the Bank of Japan’s upcoming meeting in a couple of weeks, the financial markets now price in only a 40% chance of a hike then, down from 60% last week. …
Bank will remain patient Following the release of disappointing Q3 GDP figures this Wednesday, financial markets have started to bring forward their expectations for rate cuts by the Reserve Bank of Australia. (See Chart 1.) They now see a three in four …
Syria’s rebel advance tests MENA’s geopolitics Over the past week, Syrian rebel forces have retaken significant amounts of territory from President Bashar al-Assad’s regime with little resistance so far. It’s unclear whether the rebels will make further …
5th December 2024
The US dollar has finally hit a speedbump this week, with the DXY index registering its first weekly drop since late September. Given the continued resilience of the US economy – we expect next week’s US ISM surveys and non-farm payrolls to have rebounded …
29th November 2024
CBN makes case inflation close to peaking Central Bank of Nigeria Governor Yemi Cardoso set out the case at this week’s MPC meeting for inflation to slow down, suggesting that officials are eyeing the end of the tightening cycle. The CBN’s …
Activity data highlight need for further support We were one of the few analysts to correctly predict this week’s rate cut by the Bank of Korea , and we think it is only a matter of time before the Bank cuts again. The central bank’s statement and the …
US President-elect Donald Trump’s pledge this week to levy a 25% tariff on all products imported from Canada is clearly more of a bargaining tool than a genuine threat. However, it is now apparent that the USMCA will not spare Canada from Trump’s wrath. …
Mexico in Trump’s crosshairs President-elect Donald Trump fired the opening salvo in the next round of the trade war this week, threatening to impose a 25% tariff on all imports from Mexico (as well as from Canada, plus a separate tariff on China) on day …
We have been forecasting the ECB to cut interest rates by 50bp in December for some time, and we think the case for such a move remains strong. The latest surveys suggest that the economy is hardly growing. November’s Composite PMI points to the economy …
In an economy where the government is boosting its spending and investment, we need to be extra cautious when interpreting the activity data. This is because there are lots of frequent indicators on private sector activity, but fewer indicators on public …
The ruble’s rollercoaster ride Donald Trump’s election victory has made some form of an end to the war in Ukraine more likely. (For more, see here .) His appointment this week of Keith Kellogg as his Russia-Ukraine envoy also points in this direction. Mr. …
BJP’s Maharashtra win reduces fiscal slippage risks The convincing win for Prime Minister Modi’s BJP-led alliance in the election in Maharashtra (see Chart 1) is likely to have provided some reassurance to the ruling national party that it maintains …
Coffee prices at the whim of the weather Fans of hockey-stick graphs would appreciate recent developments in the coffee market, where prices have surged by 30%+ this month . (See Chart 1.) Chart 1: Coffee Prices (2024) Source: LSEG For context, coffee …
Note: We'll be discussing US climate policy under Trump, Elon Musk, and the future of the Inflation Reduction Act in a Drop-in on Wednesday 4th December 15:00 GMT/10:00 EST . Register here for the 20-minute online briefing. States take the lead on …
