Tariff pressures remain muted, for now.
Samuel TombsUS
- In one line: No signs yet of food disinflation stabilising.
Miguel Chanco (Chief EM Asia Economist)Global
- Indian inflation dropped to its lowest level in over six years in May, coming in below expectations at 2.8%.
- Food disinflation is still the overriding story, and our daily tracker points to outright deflation here soon.
- We’ve cut our 2025 forecast to 2.8%, but raised our 2026 call to 5.0%, with this year’s base so low.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- Post-meeting comments from ECB Council members are mixed, but do not rule out another cut.
- Markets, like us, look for one more rate cut—in September—but it will be a close call.
- The ECB’s wage tracker eased in Q1, in line with other measures; wage growth will remain high.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The unwinding of tariff and tax-hike front-running dragged down GDP growth in April…
- …But the monthly fall looks exaggerated to us, so we expect GDP to rebound in May.
- We thus only shave our forecast for Q2 GDP growth, to 0.2% quarter-to-quarter, from 0.3% previously.
Rob Wood (Chief UK Economist)UK
- In one line: A dovish release that raises the chance of the MPC easing policy again in August.
Rob Wood (Chief UK Economist)UK
- In one line: BRC retail sales growth stronger than the headline suggests, consumer spending will remain robust.
Rob Wood (Chief UK Economist)UK
Sentiment up from the April lows, but small businesses remain under pressure.
Oliver Allen (Senior US Economist)US
- Handshakes in London iron out implementation of the US-China deal struck in Geneva, subject to approval.
- The 90-day tariff reprieve revived China’s exports in May, temporarily, with trade diversion to the EU…
- …Uncertainty-induced front-loading demand puts a floor under monthly growth ahead of reprieve expiry.
Kelvin Lam (Senior China+ Economist)China+
- Investor sentiment rose in June, signalling a rebound in the EZ composite PMI after two straight declines.
- Advance hard data suggest that GDP growth will slow regardless…
- ...We continue to look for EZ GDP to stagnate this quarter, after the 0.6% q/q rise in Q1.
Melanie Debono (Senior Eurozone Economist)Eurozone
- We expect the MPC to vote seven-to-two to keep Bank Rate on hold at next week’s meeting.
- Payrolls lift the chance of an August cut, but the MPC will likely stick to its “gradual and cautious” guidance.
- We are comfortable assuming only one more rate cut in this cycle, even if it may now come sooner.
Rob Wood (Chief UK Economist)UK
- US - Mr. Trump is right; the labor market will need substantial Fed easing soon
- EUROZONE - Irish distortions return; we revise down our Q2 EZ GDP forecast
- UK - CPI preview: we still think May inflation will match the MPC’s call
- CHINA+ - China’s residential market enjoying only a modest boost
- EM ASIA - RBI’s surprise front-loading of cuts doesn’t mark the finish line
- LATAM - Uncertainty and caution behind Mexico’s faltering domestic demand
ian shepherdson (Chief Economist, Chairman and Founder)Global
- The BTP-Bund spread has held broadly steady at around 100bp so far this year.
- We still see scope for further narrowing in 2025, to 70bp, implying BTPs trading inside OATs in France.
- Risks are broadly balanced, with German stimulus a downside and further trade uncertainty an upside.
Melanie Debono (Senior Eurozone Economist)Eurozone
- May’s huge fall in payrolls looks exaggerated; other indicators, such as redundancies, are improving.
- Rising LFS employment and falling payrolls point to workers shifting towards self-employment.
- Wage growth is easing gradually but still remains way above inflation-target-consistent rates.
Rob Wood (Chief UK Economist)UK
