economic outlook

China’s CPI Rises to a 21-Month High, Easing Deflation Fears but Keeping PPI in the Red

A surge in fresh vegetable prices helped propel China’s food inflation back to positive territory and headline CPI inflation to a 21-month high of 0.7% year on year in November

Industrial Output Weakens in October, Underscoring Italy’s Slow Exit from Stagnation

Italy’s industrial production data for October points to renewed weakness, tempering expectations of a stronger economic pickup in the final quarter of the year

France: Services Rebound Amid Industrial Slowdown, Limited Growth Expected in 2026

French business confidence and PMI indicators edged higher in November, driven by renewed optimism in the service sector. This rebound could support growth in the coming months, despite more mixed signals from industry

Chuseok Holiday Distorts South Korea’s Labour Data as Job Market Weakens Slightly

South Korea’s jobless rate rose in October, but it remains below 3%. The Bank of Korea is expected to keep policy unchanged in November amid concerns about property risk and volatile foreign exchange markets

Hungary’s Inflation Stagnates for the Fourth Consecutive Month Despite Persistent Price Pressures

Inflation in Hungary showed signs of stagnation in October, yet this is still not a success story. With price pressures still above the central bank’s target, it is highly unlikely that we will see any interest rate cuts until autumn next year

Czech Retail Sales Stagnate in Q3 but Outlook for Year-End Remains Upbeat

Real retail sales growth came in weaker than expected, implying stagnation since April. This warrants some caution regarding the consumption outlook. Still, households have relatively strong resources which could support robust spending as the year approaches an end

Philippines Q3 GDP Slows Sharply as Investment and Consumption Weaken

Third-quarter GDP growth disappointed at 4.0% YoY, dragged down by weak investment and softer government spending, while exports provided temporary support. We downgrade our 2025 growth forecast to 4.7% (from 5.2%) as sentiment weakens and tariff headwinds loom, reinforcing our call for a 25bp central bank rate cut in December

China and South Korea: Persistent Deflation in China and Slight Uptick in Korean Unemployment

China's deflation is expected to continue, while the government releases data on retail sales, fixed asset investment, and industrial production. South Korea will release the unemployment rate

CEE Markets Brace for Inflation Data and Central Bank Meetings

Yesterday's PMI showed a mixed picture in the region, with the Czech Republic's lower-than-expected, while Poland and Hungary surprised with higher-than-expected readings. Inflation in Turkey surprised the market lower (2.6%/32.9%), in line with our estimate, and inflation returned to a declining trajectory.

Asia Outlook: RBA to Hold Steady as Regional Inflation and Trade Trends Diverge

The Reserve Bank of Australia is expected to hold rates steady. Other highlights of the week include key data on China, Japan, South Korea, Taiwan and the Philippines

Spain’s Growth Cools but Remains Resilient Amid Broader European Slowdown

Spain’s economy grew by 0.6% over the third quarter, following a robust second quarter, as external demand weakened. With signs of cooling in industrial activity and tourism, growth is expected to normalise over the coming quarters and into 2026

German Economy Braces for Prolonged Stagnation Despite Fiscal Stimulus

The Ifo index increased in October on the back of improving expectations, while the current assessment worsened once again

Bank of Korea Likely to Resume Rate Cuts in Early 2026 Amid Housing Market Uncertainty

The Bank of Korea kept its benchmark rate steady at 2.5%, signaling a shift toward a less dovish policy stance. For the second consecutive meeting, one member dissented, while a growing number prioritised financial market stability over economic growth

Romania’s Inflation Holds Below Expectations as Food Prices Ease and Growth Risks Mount

Price pressures remained at a constant 9.9% in September, with seasonal food items offering mild relief. Services inflation continues to show resilience, and wage growth dipping below 5.0% adds further drag on demand. Our year-end projections remain 9.6% for 2025 and 4.5% for 2026

Italy’s Industrial Production Contracts Sharply, Weighing on Q3 Growth Prospects

August’s Italian production numbers suggest that a hoped-for timid improvement in the third quarter has not materialised. While some caveats should apply when dealing with summertime data, it would seem the onus now lies with a growth in services

Switzerland Faces Trade War Fallout as US Tariffs Threaten Key Export Sectors

Switzerland’s economy is under significant pressure due to the imposition of US tariffs on Swiss exports. As such, we have revised down our GDP growth forecasts

Hungary’s Inflation Stuck Above Target Despite Currency Strength and Government Measures

Hungary's September inflation numbers came in flat as expected, but we don't take long-term comfort in that. Price pressures are still far from the central bank’s target. Looking ahead, there is some light at the end of the tunnel. A warning, though: it could be a train 

Eurozone: Consumer Confidence Rebounds, but Retail Spending Remains Muted

Eurozone retail sales declined by 0.1% in August compared to July. This sales trend has been roughly flat since April. The worried eurozone consumer is seemingly shying away from the shopping street despite improvements in purchasing power across the bloc

Eurozone Inflation: Stable Core Amid Temporary Energy Spike

The pickup in inflation to 2.2% in September was mainly due to energy effects, which will fade in the months ahead. A small undershooting of the inflation target actually seems realistic around the turn of the year. Expect the ECB to hold rates steady for now

Netherlands Inflation Surges in September: Core and Service Prices Drive Higher

Headline inflation in the Netherlands surged well above expectations in September. Although a swift return to a more normal pace wasn’t anticipated, today’s data illustrates just how persistent price pressures can be

Italy’s Inflation Stable at 1.6% in September Amid Stagnant Economy

With all driving factors set to remain in place, we expect inflation in Italy to continue to move within a narrow sub-2% band over the fourth quarter and confirm our forecast for average 2025 inflation at 1.7%

Hungary’s Wage Growth Slows but Remains Strong Amid High Inflation and Weak Consumer Confidence

Wage growth came in as expected in July. It seems likely that it will remain stable at this level in the near future. However, households still prefer to save rather than spend due to weak consumer confidence

Poland: Slowing Inflation Paves Way for September Rate Cut

The MPC wraps up its first post-summer holiday meeting on 3 September, and we expect a 25bp rate cut as policymakers attempt to adjust the monetary stance to lower inflation. As we see inflation sustainably returning to target, we’re still pencilling in another cut later in the year, likely in November

Germany Hits Three Million Unemployed: Labour Market Faces Prolonged Weakness

The number of unemployed people has increased above the three-million mark for the first time since 2015, providing further evidence that a long period of economic stagnation eventually takes a toll on the labour market

Italy Struggles to Reignite Growth as Confidence Weakens Across Key Sectors

August confidence indicators paint a picture of economic inertia, with growth momentum still concentrated in the services sector

Core Inflation Stable as Bank of Canada and Riksbank Signal Dovish Bias

A mild miss in last week’s July inflation figures provided a bit of support for the Canadian dollar, which posted weekly gains against most other G10 currencies.

South Korea’s Consumer Sentiment Strengthens for Fifth Consecutive Month

South Korea’s latest fiscal stimulus contributed to improved consumer sentiment and greater growth momentum. But these effects may prove temporary. Even so, the Bank of Korea will stand pat later this week, as it focuses more on housing prices. 

Eurozone PMIs Signal Manufacturing Recovery Amid Trade Uncertainty

The small increase in the composite PMI from 50.9 to 51.1 indicates that the eurozone economy continues to weather global storms quite well. Improvements in new orders and increased hiring add to a picture of accelerating growth, but a muted pace seems likely given significant downside risks to the outlook

UK Q2 GDP Beats Expectations but Underlying Weakness Limits BoE Policy Impact

At face value, the UK's 0.3% second-quarter growth performance looks reasonable amid a flurry of global and domestic headwinds. But this is largely concentrated in components not intrinsically linked to underlying economic performance, and the Bank of England will take these figures with a pinch of salt. We expect growth to slow in the second half

Eurozone GDP Confirms Modest Growth but Industrial Production Slump Delays Recovery

A sharp plunge in industrial production data suggests that the initial signs of an inventory cycle turn were mainly driven by US frontloading rather than a genuine cyclical recovery. Industrial weakness looks set to continue

Poland Posts Surprise Current Account Surplus in June Amid Trade and Export Shifts

Poland’s external current account surplus in June was a positive surprise, as it was also driven by a positive balance in merchandise trade. One data reading does not necessarily signal a new trend – but it may suggest a change in underlying macro developments, especially softer domestic demanda

CBE’s Shift to Data-Driven Approach Leaves Egypt’s Monetary Policy Playing Catch-Up

The decline in Egypt’s annual headline CPI number for February was exceptionally large at over 12pp, but it did not really tell us anything that we did not already know.

Markets Rally Ahead of Tariff Rollout Amid Economic Data Releases

Stocks ended higher ahead of President Donald Trump’s sweeping tariff announcement. Treasury yields rose following the private payrolls and manufacturing data. The dollar fell against major currencies, while gold climbed on safe-haven demand. Oil prices edged higher. 

Markets Rally as Tariff Fears Ease; Dollar Strengthens, Gold Slip

Stocks closed sharply higher and Treasury yields climbed after reports that President Donald Trump's tariff plan may use a more targeted approach than previously thought, boosting risk appetite. The dollar strengthened as U.S. business activity picked up in March, pushing gold lower. Oil prices were up on Venezuela oil and gas tariffs. 

FOMC Aftermath. Dovish Fed Strategy and Tactical Shifts in FX and Rates

Post-FOMC strategy thoughts Dovish Fed – high convictions in long JPY/KRW, short S$NEER, long 10y IGB; increase short CNH basket conviction; enter short THB/JPY. 

Market sentiment steady post-Fed; focus shifts to BoE as Powell calms recession fears

Market sentiment was rather positive ahead of the FOMC statement, with European equities rising and € credit spreads tightening. In the wake of the monetary policy decision, equities rose and bond yields eased further after Jerome Powell indicated that the Federal Reserve saw no need for drastic action in the face of Donald Trump's trade war.

EUR-USD Resilience Holds Amid ECB Rate Cut Expectations and Market Sentiment

Trump's Tariff Threats Loom Large: Economic Impacts for Canada, Big Banks, and Commodities

Canada's main stock index closed lower as escalating global trade tensions fueled risk-aversion, with strong bank earnings failing to boost market sentiment. 

The S&P/TSX composite index fell 0.79% to end at 25,128.24, following three consecutive sessions of gain. 

The U.S. dollar was rose 0.75% against its Canadian counterpart to C$1.4445, after touching its weakest intraday level since February 4 at 1.4442. It was the fifth straight day of declines for the currency.

Plunging Consumer Confidence and Tariff Fears Shake Markets: Dollar, Oil, and Gold Hit Hard

Stocks struggled with the S&P 500 and the Nasdaq touching one-month lows as a dour consumer confidence report put mounting economic uncertainties into sharp relief and prompted a selloff. "This is clearly a  risk-off day and a continuation of a risk- off month," said Peter Tuz, president of  Chase Investment Counsel in Charlottesville, Virginia.