economy

Gilt yields have risen on BoE repricing and increase in risk premium

Gilt yields jumped after reports the UK government was scrapping plans to raise income tax, casting fresh doubt over how a £30bn gap will be plugged. We expect about half to come from upfront tax hikes, so yields may not climb much further. If we’re wrong, blame the politic

China’s 3Q25 GDP Beats Expectations Amid Weak Consumption and Property Slump

Chinese GDP slowed by less than expected in the third quarter amid the boost from external demand. With China on track to hit this year's growth target, we could see less policy urgency. But weak confidence translating to soft consumption, investment, and a worsening property price downturn still need to be addressed

US July CPI and Fiscal Deficit Send Mixed Signals, but Long-End Yields Face Ongoing Bearish Pressure

German 30-year yields are on the rise, with the curve hinting at more to come. German fiscal plans and Dutch pension fund reform are factors in play. The US is in a similar mode, with fiscal and CPI data followed by upward pressure on long yields

Dutch Inflation Slows to 2.5% in July, but Persistent Service Costs Keep 2% Target Out of Reach

Inflation in the Netherlands continued its downward trajectory in July, dropping to 2.5% year-on-year from 2.8% in June. A sustained return to the 2% target is not in sight yet, however, as service inflation remains quite stubborn

UK Labour Market Shows Signs of Stabilisation as BoE Eyes Further Rate Cuts

The UK jobs market is undoubtedly cooling, though a more modest fall in payroll employment suggests that the worst may be behind us, following big tax and Living Wage hikes. Better news on wage growth suggests the Bank can still afford to cut rates in November, though after last week's hawkish meeting, this call has become less clear-cut

From Policy Fog to Economic Focus: The Fed’s Path Forward

Moment of clarity

 – Risk assets rallied in July as trade uncertainty eased, despite a continued rise in the effective tariff rate.

 – With policy uncertainty fading, market attention is shifting to economic data. Friday’s employment report underscores that the economic consequences of recent policy shifts are only now becoming visible.

Norway’s Inflation and Weak Krone Support Pause in Rate Cuts, NOK Seen Recovering

Norway’s central bank surprised with a cut in June. However, we are much more confident that it will keep rates on hold at this week’s meeting, following a rebound in inflation and a significant weakening of the krone. We believe EUR/NOK is approaching an inflection point and anticipate NOK strengthening into year-end

Markets Open the Week on Optimism, Eyes on Ukraine, Inflation Data, and Tech Sector Moves

The week starts with gains in most Asian indices, and futures are in the positive in the early hours of the trading week. The S&P 500 posted its strongest week since late June on the back of robust earnings, further appetite for technology stocks, and hopes of progress in the Ukrainian war.

Global Markets Show Mixed Signals Amid Hawkish BoE Cut and Geopolitical Developments

Today's huge turn in the US stocks have sent another round of confusion in the daily cross-asset picture.

Markets Caught Between Hope and Headwinds: Trump Diplomacy, Tariffs, and Tech Momentum

European equity markets gained recently on hopes that Donald Trump might broker a meeting between Vladimir Putin and Volodymyr Zelensky. However, Putin has not yet agreed to dialogue with Kyiv. Regardless, US crude is below a key support level (and falling) this morning on rising hope of progress – a move that could rapidly reverse as Russia looks much less enthusiastic to end the Ukrainian war then Trump is.

Philippines Q2 Growth Meets Expectations, but Headwinds Persist

The Philippines' GDP growth picked up in the second quarter compared to the first, largely driven by a surge in goods exports ahead of tariffs being implemented. We don't believe that the relative strength in today’s data will deter the central bank from cutting rates in August, as CPI inflation remains firmly below the inflation targe

Hungarian Industry Slips Further as Retail Growth Remains Uneven

The incoming industrial and retail data for June did not alter the overall picture of the recent dichotomy in trends. Industrial production continues to decline, while retail sales are rising. We do not expect these trends to change significantly for the remainder of the year

Trading Under Pressure: The Age of Economic Power Plays

'Tariff' may be the most beautiful word in Donald Trump's dictionary. And while tariffs will continue to dominate headlines for the rest of the year, let me introduce my economic term of the summer: Power Play

Italian Industry Bottoms Out, But Recovery Remains Elusive

Industrial production in Italy has likely reached a bottom, edging up slightly in June. However, a clear recovery is not imminent. It might come when the German infrastructure investment plan is implemented

Czech Industry Stable, Construction Booming as Wages Rise

Industrial production continued to expand in June, although new orders fell short of expectations, particularly given the decline in foreign orders. Meanwhile, the construction upturn is likely to continue, driving the Czech recovery and bolstering household budgets. Wage growth picked up in both manufacturing and construction

Retail Recovery and Labour Strength Bolster Eurozone Resilience

Retail sales increased by 0.3% in June, with the year-on-year growth pace accelerating from 1.9% to 3.1%. This suggests that household consumption is likely to underpin growth in the second half of the year

RBI Holds Rates Steady, Signals Patience Amid Trade Headwinds

While the Reserve Bank of India held rates steady, it significantly lowered its inflation outlook. The combination of softer inflation and emerging downside risks to growth suggests there is still room for further rate cuts - particularly if monetary policy transmission improves. Meanwhile, a stable rate differential should be supportive of the rupee

USD Eyes Fed Chair Pick as Trump Signals Imminent Announcement

President Trump hinted that Kevin Warsh, Kevin Hassett and two others are leading the race for the next Fed Chair and might be announced soon after Governor Adriana Kugler’s early exit. We think the dollar would welcome Warsh, but would get hit by Hassett’s nomination. We retain a short-term USD bearish bias as FX has room to catch up with Fed pricing swings.

Oil Market on Edge: Secondary Tariff Uncertainty and Shifting Global Demand

The oil market is awaiting greater clarity on the potential for secondary tariffs on buyers of Russian oil, with President Trump’s deadline for a Russia-Ukraine peace deal scheduled for Friday

Tech-Led Rally and Bond Market Optimism Lift Sentiment; Eyes on Tariffs, Inflation, and Fed Cuts

Equity markets rebounded after Friday’s falls as investors looked to ‘buy the dip.’ Tech stocks led the market higher. The rally in globally treasuries was extended which also supported stock valuations. 

Upgrades and Catalysts Across Sectors: Tariff Resilience, Rate Tailwinds, and AI-Driven Momentum Fuel Bullish Revisions

We are upgrading W to Buy. We had downgraded to Neutral after initial tariff announcements and missed real upside, but still upgrade to Buy as the tariff macro has been less of an impact than expected, execution has continued (we never doubted this), and Wayfair has demonstrated that it’s very well positioned to capture share amidst market disruption. 

Markets Rebound Despite Macro Noise; AI-Led Momentum Meets Systematic Selling Pressure Ahead of ISM Services

GS Basics - Moving On. ISM Services. Systematic Length FICC and Equities | 5 August 2025 | 6:18AM UTC Overnight, Japan futures were unchanged. The JGB auction was a bit underwhelming, but fixed income remains well-supported, likely a reflection of last week’s softer U.S. data. 

Czech Inflation Remains Elevated Amid Food Price Drag; Core Pressures Persist, Supporting CNB’s Hawkish Stance

Consumer prices maintain solid growth, with persistent core inflation outweighed by softer food price dynamics. Both headline and core inflation may hover close to the 3% upper bound of the tolerance band around year-end, which should foster a hawkish stance by the Czech National Bank. Pro-inflationary scenarios take the stage for now

USD Under Pressure as BRICS Face US Sanctions Risk; EUR and CZK Poised for Divergent Paths Amid Inflation and Tariff Uncertainty

One could be forgiven for thinking that President Trump has now turned his attention to disassembling the BRICS political grouping. India, Russia and Brazil are squarely in focus currently. And benign market conditions in August clearly rely on no deterioration in the current US-China detente. Away from geopolitics, the focus today is on US ISM services 

South Korea: Inflation Remains Anchored, BoK Poised to Cut in October

With South Korean consumer inflation near 2% and GDP projected to rise, the Bank of Korea is likely to wait for clearer signs of housing market stability before easing. We still prefer an October rate cut over August.

CAD Under Pressure as Tariffs Bite and BoC Signals Dovish Tilt

As discussed in the USD section, new 'reciprocal' tariffs are having little market impact. Canada deserves special attention in our view, though, especially after Mexico secured another pause extension yesterday.

Japan Export Trends 1H25: Semiconductor Strength and Tariff-Induced Shifts

An increase in Japanese exports in the first half of 2025 isn’t shielding profit margins from tariff pain. Exports spiked in the first quarter amid front-loading, but it led to a significant technical correction in the second quarter. Cutting prices might have helped absorb some tariff impacts, but it’s sacrificing profit margins

Regional Snapshot: Mixed Signals Across Asian Economies in July Data

The main events of the week will be key data reports from China, Japan, South Korea and Taiwan as economists try to assess trade-war effects across Asia. Also, we expect the Reserve Bank of India to hold interest rates steady

Quiet August in FX Markets and the Resurgence of Carry Trades Amid Low Volatility

If the FX options market is any guide, and once this week's big event risks are out of the way, investors are pricing a quiet August for markets. Low levels of volatility inevitably draw focus to the carry trade – a very popular strategy over recent months. Here, we back test strategies and evaluate the risks and opportunities in the EMFX space