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August 29, 2025
U.S. July Personal Income and Spending and Core PCE Prices as expected, but Advance Goods Trade Deficit up as imports rebound
August 29, 2025 12:58 PM UTC
July’s personal income and spending report is in line with expectations, with the 0.3% core PCE price index matching the core CPI, and gains of 0.4% in income and 0.5% in spending also as expected. However a rise in the July advance goods trade deficit to $103.6bn from $84.9bn is unexpected, and l
August 28, 2025
Preview: Due August 29 - U.S. July Personal Income and Spending - Core PCE Prices to match Core CPI
August 28, 2025 1:35 PM UTC
We expect PCE price data to match the July CPI, with a 0.3% rise in the core rate and a 0.2% increase overall. We expect both personal income and spending to rise by 0.5%, ahead of prices.
ECB July Account: Policy ‘On Hold’ Leaves Easing Door Open But Less Widely So
August 28, 2025 12:37 PM UTC
The account of the July 23-24 ECB Council meeting saw some discussion about cutting at that juncture but with no immediate pressure to change policy rates what was then exceptional uncertainty added to arguments for keeping interest rates unchanged. In particular, it was seen that maintaining policy
U.S. Lagged Interest Rates: Only Hurting a Bit
August 28, 2025 12:08 PM UTC
A big shock from lagged higher interest rates is not being seen in the data looking at financial conditions; the household savings ratio and interest rate sensitive sectors. The impact of the Trump tariffs is still uncertainty, but our alternative scenario of a hard landing remains at 25% and ou
August 26, 2025
US 10yr: Fed Independence V Economy and Budget
August 26, 2025 12:14 PM UTC
10yr yields face upward pressure from Fed independence questions, but downward pressure from a slowing economy and a better supply picture with CBO estimates of USD4trn of tariff revenue over 10 years. One way to continue playing these themes is for yield curve steepening, where we see scope for the
EZ HICP and Jobs Review: Headline at Target as Services Inflation at Fresh Cycle-low
August 26, 2025 11:51 AM UTC
HICP, inflation – still at target – is very much a side issue for the ECB at present, albeit with the likes of oil prices and tariff retaliation and a low but far from authoritative jobless rate (Figure 3) possibly accentuating existing and looming Council divides. Regardless, despite adverse
France and Italy: Deficit, ECB QT and Foreign Debt Holders Stories
August 26, 2025 7:35 AM UTC
A large budget deficit in France, looking persistent given the current political impasse, combined with ECB QT means that the market has to absorb a very large 8.5% of GDP of extra bonds. Our central scenario is that persistent French supply causes a further rise in 5yr plus French government yields
August 25, 2025
Jackson Hole: Fed/ECB/BOJ and BOE on Labor Markets
August 25, 2025 9:02 AM UTC
Fed Powell focused on the cyclical softening of employment to back a more dovish undertone. In contrast other central bank heads focused on structural labor market issues. While ECB Lagarde was pleased with the post COVID EZ picture, current economic softness still leaves us forecasting two furt
August 22, 2025
Fed Powell: Signals September Cut
August 22, 2025 2:35 PM UTC
Fed Chair Powell spent the first 10 minutes at Jackson hole reviewing current data and discussing the policy stance. Powell clearly signaled a September cut, given downside risks to employment after the July employment report revisions. However, Powell did not signal whether the move will be 25b
August 21, 2025
Eurozone: ECB Feels it Has More Reason to ‘Wait and See’?
August 21, 2025 10:02 AM UTC
To suggest that recent EZ real economy indicators, such as today’s August PMI flashes, have been positive would be an exaggeration. But, at the same time, the data (while mixed and showing conflicts - Figure 1) have not been poor enough to alter a probable current ECB Council mindset that the ec
Bank Indonesia Delivers Surprise Second Rate Cut to Shield Growth
August 21, 2025 5:10 AM UTC
BI is opting for early stimulus while macro buffers remain strong—stable rupiah, low inflation, and manageable deficits. However, this window may close quickly if external risks materialise. Business leaders should expect a monetary pause in Q3, but prepare for moderate volatility if inflation or
August 20, 2025
2025 Q2 Country Insights Scores to Download in Excel
August 20, 2025 12:00 PM UTC
The Country Insights Model is a comprehensive quantitative tool for assessing country and sovereign risk by measuring a country’s risk of external and domestic financial shocks and its ability to grow. The access to our full range of scores across 174 countries corresponding to the second quarter
U.S./China Trade Deal: Slow Progress
August 20, 2025 10:25 AM UTC
· Overall, we would attach a 50% probability to a trade framework deal being announced in Q4, though this is unlikely to be comprehensive and could merely be a collection of measures. Even so, the risk also exists of trade negotiations dragging onto 2026 and then reaching a deal or fa
August 19, 2025
China Slow Diversification: Gold And Others
August 19, 2025 8:05 AM UTC
China’s diversification from U.S. Treasuries appears to be at a slow pace. Gold is the obvious alternative if geopolitical tensions were to rise or skyrocket in the scenario of a China invasion of Taiwan. However, Gold holdings are merely creeping higher and suggesting no urgency from China
Rate Hold Expected as Bank Indonesia Eyes H2 Trade Risks
August 19, 2025 6:26 AM UTC
With headline inflation still well-contained, core pressures softening, and the economy showing signs of resilience, Bank Indonesia is expected to keep rates on hold. Further easing may come later in H2—but only if external risks re-intensify or domestic growth falters.
August 18, 2025
U.S. Strategic Fiscal Comparisons
August 18, 2025 9:05 AM UTC
The U.S. short average term to maturity is a structural fiscal weakness if higher rates lift U.S. government interest costs close to the nominal GDP trend. Hence, Trump’s pressure for fiscal dominance of the Fed to deliver lower policy rates and reduce U.S. government interest rate costs. Howeve
August 15, 2025
Preview: Due August 29 - U.S. July Personal Income and Spending - Core PCE Prices to match Core CPI
August 15, 2025 2:34 PM UTC
We expect PCE price data to match the July CPI, with a 0.3% rise in the core rate and a 0.2% increase overall. We expect both personal income and spending to rise by 0.5%, ahead of prices.
U.S. July Retail Sales - Resilient entering Q3
August 15, 2025 12:51 PM UTC
July retail sales with a 0.5% increase are in line with expectations, with net upward revisions totaling 0.4%. Ex auto sales rose by 0.3% also with 0.4% in upward revisions while ex auto and gasoline sales rose by 0.2%, here with revisions of only 0.2%. The data suggest consumer spending is holdin
China Slowdown In July
August 15, 2025 7:03 AM UTC
• Retail sales sluggishness reflects households cautious due to the hit to housing wealth and uncertainty over jobs and wage growth. Investment softness reflects not only residential property weakness, but also a slowdown in government infrastructure. This weakness could see a top up fi
August 14, 2025
U.S. Markets: Soft Versus Hard Landing
August 14, 2025 1:02 PM UTC
A mild recession would likely trigger the Fed to ease quickly to 2.0-2.5%, which would produce yield curve steepening but would likely drag 10yr yields down to 3.50-3.75%. The S&P500 would likely fall to 5000 in this scenario, as corporate earnings are axed; buybacks slow and the price/ea
August 13, 2025
September Fed ease now more likely than not, but far from assured
August 13, 2025 3:29 PM UTC
A September FOMC easing now looks more likely than not, but remains far from a done deal. We are however revising our call to two 25bps FOMC easings this year, in September and December, from just one, in December. 2026 is harder still to call given threats to Fed independence, but we continue to ex
China: Echoes of Japan?
August 13, 2025 8:05 AM UTC
Overall, some of China’s private businesses and households are suffering from Japan’s style balance sheet recession. Combined with slowing productivity and a shrinking workforce, this points to slower trend growth in the coming years. However, fiscal stimulus and the clean-up of Loca
India CPI Review: Headline inflation drops sharply on account of food prices
August 13, 2025 7:38 AM UTC
India’s retail inflation fell to 1.55% yr/yr in July 2025, its lowest since 2017 and below the RBI’s 2–6% target band for the first time in over six years. The drop was driven by a sharp contraction in food prices, even as edible oil and fruit inflation remained elevated. With inflation well b
August 12, 2025
U.S. July CPI - Core rate, particularly services, a marginal disappointment
August 12, 2025 1:02 PM UTC
July’s CPI is in line with consensus at 0.2% overall, 0.3% ex food and energy, but the core rate of 0.322% before rounding is a little high for comfort. The detail shows the acceleration from June was more in services than goods, so the story is not a simple one of tariffs.
