Filtered by Region: G10 Use setting G10
The latest batch of PMIs suggests that the US economy is growing strongly while Europe is stagnating or contracting. The US economy is no doubt growing more strongly than its advanced economy peers heading into 2025, but the PMIs are probably overstating …
16th December 2024
Housing market heating up The rise in home sales in November builds on the jump in October and is particularly positive considering some buyers may have held off from purchases ahead of the new mortgage rules that took effect this month. Prices are set to …
Housing market resilient to higher mortgage rates November’s RICS survey provides further evidence that housing activity and prices remained resilient to the rise in mortgage rates in November. And our view that mortgage rates will start to fall again …
12th December 2024
With pressures on public spending continuing to grow, this has raised the chances that the Chancellor, Rachel Reeves, raises spending further in her 2025 Spending Review. If she raises spending and funds it with higher taxes, that would probably add to …
11th December 2024
Although the Bank of Canada cut interest rates by another 50bp today, its communications were more hawkish than might have been expected, with the Bank no longer indicating that further cuts are guaranteed and instead saying it “will be evaluating the …
The peak in new apartment supply has passed, with completions set to drop back sharply over the next few years. If demand continues to hold up well as we expect, this should put downward pressure on the vacancy rate and support a modest pick-up in rent …
10th December 2024
While mortgage interest cost (MIC) inflation has historically turned negative during, or after, loosening cycles, we expect it to remain positive this time and rebound from 2026. This is because, in contrast to previous monetary policy cycles, the …
Our new Bank of England Caseometer helps track whether the Bank is becoming more inclined to cut interest rates faster and further or slower and not as far. Our forecast is that rates will continue to be cut gradually, but that they will fall to 3.50% in …
The RBA sounded more dovish today and it’s looking increasingly likely that it will lower interest rates sooner rather than later. While a downside surprise in Q4 inflation could trigger a February rate cut, we think the continued tightness of the labour …
A vast share of our clients highlighted geopolitics and/or Trump as their biggest blind spots going into 2025 when polled at our recent London roundtables. Meanwhile, a large majority thought that interest rates will be the key driver of returns next …
9th December 2024
Our expectation of rising evidence of distressed assets in 2024 has come to bear, but we think more is still to come over the next couple of years. Some of that will stem from matured loans requiring refinancing, which have already hit an all-time high in …
5th December 2024
The rebound in job openings in October suggests that labour market conditions are stabilising at a healthy level. Meanwhile, despite a small rebound in the private quits rate, it still points to wage growth slowing sharply. The rebound in job openings to …
3rd December 2024
Tight supply conditions will drive a solid rent outlook for the student housing sector over the next year. But the bigger picture remains one of slowing demand as steady declines in the college-age population and curbs on immigration provide a substantial …
The latest PMIs show that while China’s manufacturing sector is benefiting from a fiscal boost, industry in most of the rest of the world continues to struggle. With demand weak and little disruption on the supply side, indicators of goods price pressures …
2nd December 2024
Although Australian house prices edged up a notch in November, we remain sceptical about prospects for a second wind in the housing cycle. Given that the RBA is unlikely to provide interest-rate relief until mid-2025 at the earliest, we expect the …
The Chancellor, Rachel Reeves, has confidently claimed that she will not be “coming back with more taxes”, but developments since the Budget have already whittled away her fiscal ‘headroom’. Further tax hikes are not inevitable, but they are more likely …
28th November 2024
While the RBNZ started hiking rates earlier during the recent tightening cycle than the RBA, it also lifted rates to a higher peak. The RBA tempered the degree of tightening in order to preserve the large falls in unemployment seen during the pandemic and …
Even if the government’s easing of planning rules were to mean that at least 300,000 new home approvals in England were granted a year, the number of construction workers would need to rise significantly. We estimate about 500,000 extra construction …
26th November 2024
Residential construction employment has been performing much better than the slump in construction over the past year might have implied. We suspect that is because job losses in the new home construction sector have been concentrated among undocumented …
25th November 2024
Given the considerable uncertainty surrounding what policies president-elect Donald Trump will enact during his second term, there is a temptation to read a lot into his Cabinet nominations, but we would caution against that. Following his comprehensive …
The latest flash PMIs suggest that while industry continues to struggle across advanced economies, services activity is now slowing in Europe too. While reduced political uncertainty seems to have lifted business sentiment in the US, the PMIs suggest that …
22nd November 2024
Unsurprisingly, a second Trump presidency will support oil and gas production while rolling back environmental regulations. The fate of the Inflation Reduction Act is less certain, given that the support for manufacturing investment aligns with Trump’s …
The slump in the participation rate this year at least partly reflects the cyclical weakness of hiring, which means that the labour market is weaker than the unemployment rate alone might suggest. The silver lining is that an eventual rebound in …
20th November 2024
We expect the Reserve Bank of New Zealand to cut its policy rate by 50bp, to 4.25%, at its meeting next week. With inflation back at target, the labour market loosening rapidly and activity in the doldrums, there continues to be a compelling case for the …
Higher US interest rates will probably continue to weigh on government bonds globally. But we still expect bond yields in most developed market (DM) economies to fall back by the end of 2025, as domestic monetary policy eases further. Sovereign yields …
19th November 2024
A plunge in the average household size kept housing demand strong during the pandemic even as population growth ground to a halt. RBA estimates suggest that the average household size has remained low ever since, but economic forces point to a rebound. …
18th November 2024
It is increasingly clear to us that pricing in all three regions we forecast has bottomed, even if appraisals are yet to reflect that in mainland Europe and the US. And although we expect recent events – the election of Donald Trump and the recent UK …
14th November 2024
The UK is not as exposed to US import tariffs as many other economies and we suspect any resulting reduction in UK GDP would be very small. That said, the car and pharmaceutical sectors are the most vulnerable areas of the UK economy. And we don’t think …
While Trump has vowed to lower mortgage rates to 3%, we expect the net effect of his policies to have the opposite effect, keeping borrowing costs higher for longer. With that in mind, we are changing our home sales forecast to show a shallower and later …
Our forecast that Bank Rate will fall slower means that we now think mortgage rates will decline from 4.4% now to 3.9% by the end of 2026, rather than to 3.5%. But we still think that mortgage rates will fall by more than most expect and that house price …
Improvement in housing market sentiment may be overdone October’s RICS survey points to robust house price growth but the Budget means that mortgages rates will probably fall a bit slower than we previously thought, which will restrain house prices next …
Our base case is that the LDP/Komeito coalition will be able to push through major pieces of legislation, including a supplementary budget by year-end, with only minor concessions to the Democratic Party for the People. If the DPP insists on its radical …
13th November 2024
As expected, after a run of stronger activity and inflation data since it started its rate cutting cycle with a 50bp reduction in mid-September, the Fed opted for a more modest 25bp cut at the conclusion of its two-day FOMC meeting, taking the fed funds …
7th November 2024
We have revised some of our key market forecasts in response to Donald Trump’s victory and the news that the Republicans are on course to regain full control of Congress. These include higher projections for the 10-year Treasury yield and the greenback. …
Watch a recording of our post-MPC online briefing here . While cutting interest rates from 5.00% to 4.75% today, the Bank of England implied that the Budget means rates will continue to fall only gradually. We agree and due to the Budget (and not the US …
The recent weakness in productivity growth is only partly due to a cyclical hangover from the pandemic as it also reflects the structural weakness in investment. With investment growth set to remain mediocre, productivity growth will remain lacklustre …
Although the Reserve Bank of Australia maintained a broadly neutral stance at its meeting today, we still think it will start to lower interest rates as soon as February next year. However, with the labour market remaining resilient and productivity …
5th November 2024
While the latest PMIs suggest that global industry started Q4 on a slightly better footing, the outlook for the manufacturing sector remains poor, especially in advanced economies. Meanwhile, although the big fall in DM goods inflation is now behind us, …
4th November 2024
Rate cuts likely to cushion house price slowdown Australia’s housing rally continued to lose steam in October. However, with the RBA set to cut interest rates from early-2025, there are good reasons not to be too bearish on the outlook for house price …
31st October 2024
The policies announced in yesterday’s Budget won’t have a significant bearing on the housing market. But the prospect that interest rates are a bit higher may soften demand and creates some downside risk to our forecast for house price growth of 5.0% next …
Residential’s growing share of investor portfolios speaks to the buzz around its potential to keep providing outsized returns. But will the sector continue to deliver? Join our Commercial Real Estate team for a special online briefing all about the …
BoJ Governor Ueda sounded more optimistic today and we’re sticking to our forecast of another rate hike at the Bank’s next meeting in December, though we don’t expect further tightening in 2025 . It came as no surprise that the Bank left its policy rate …
The NCREIF Q3 index posted a positive return for the first time in two years, with only offices recording a negative outturn. But with firmer evidence that poorly capitalized banks have been less likely to mark loans as non-performing, as well as …
28th October 2024
The government’s new immigration plan implies that the population will decline by 0.2% in both 2025 and 2026, a huge shift from population growth of almost 3% over the past two years. That means GDP growth is likely to remain subdued in the next couple of …
24th October 2024
The latest flash PMIs suggest that GDP growth got off to a weak start in Q4 in most major advanced economies. The surveys also imply a slowdown in both services activity and employment growth in October, meaning that the ECB and Bank of England may up the …
We discussed the Bank’s policy decision in a Drop-In. You can view the recording here . The weak economic backdrop means we still see a strong case for the Bank of Canada to follow its larger 50bp cut today, which took the policy rate to 3.75%, with …
23rd October 2024
Alternatives have grown in importance in portfolios in recent years and structural drivers including AI, an aging population and poor housing affordability point to further growth in occupier demand for these assets. With investors increasingly looking …
22nd October 2024
With two weeks to go until election day, Donald Trump has opened a meaningful lead over Kamala Harris in betting markets, although the latest polling suggests the race remains too close to call. To recap, we suspect Trump’s proposed curbs on immigration …
Upward revisions by the ULI consensus mean our forecasts remain more downbeat over the next couple of years. However, this is largely down to our weaker view on industrial, while our forecasts for the other sectors are more optimistic, particularly for …
21st October 2024
Although corporate credit spreads in the US and the UK have nearly reached multi-decade lows, we think they will remain near those levels over the next year or so. And we don’t see spreads in the euro-zone widening either, despite dim economic prospects. …
18th October 2024
