Pantheon Publications

24 July 2025 Emerging Asia Monitor Taiwan's retail sales shrink in Q2: downside risk to our 6.4% GDP call

• Taiwan’s retail sales were worse than we expected in June, as they declined by 2.9% year-over-year.
• This spells trouble for consumption in next week’s Q2 GDP; overall growth should still come in strong.
• Malaysian inflation fell yet again, to 1.1%, while the government has announced more fuel subsidies.

24 July 2025 China+ Monitor Japan's trade deal should bring forward BoJ's next rate hike

• We are raising our growth and inflation forecasts for Japan, after yesterday’s relatively benign trade deal.
• The BoJ is likely to resume rate hikes in October, as it forms an initial view on the 2026 wage outlook.
• USDJPY is likely to strengthen moderately; but political risk was evident in the 40-year JGB auction yesterday.

24 July 2025 UK Monitor Signs of stabilising vacancies bode well for an easing in job falls

• Vacancies are one of the least accurate leading indicators of near-term job growth.
• Moreover, high-frequency data suggest that vacancies have stabilised...
• ...In part as small firms’ hiring intentions recover sharply from payroll-tax-hike-induced falls in April.

23 July 2025 US Monitor Further fall in housing inflation will give the Fed some breathing room

• Housing inflation will fall much further over the rest of this year, lagging the real-time rent data…
• …Lower housing inflation will offset about a quarter of the remaining uplift from tariff pass-through.
• It's in no one's interest for the administration to seek to oust Fed Chair Powell.

23 July 2025 LatAm Monitor Mexico's growth holding up in Q2, but headwinds mounting into H2

• Mexico’s IGAE data show resilience, yet fading services and capex signal weak momentum into H2.
• Labour-market softness is deepening, with job creation stalling and real wage growth slowing further.
• Banxico is facing pressure to ease, but sticky core services inflation will constrain the pace of cuts.

23 July 2025 Emerging Asia Monitor Indian core IP finally found its feet in Q2, but short-term risks prevail

• Indian core IP growth rose for a second straight month in June, to 1.7%, after its April plunge…
• …Refined petroleum product growth has recovered and should stabilise from here on out.
• Overall momentum is still deteriorating, however, with the electricity slump particularly worrying.

23 July 2025 UK Monitor Payroll falls should ease as tax hike drag begins to fade

• We estimate that most of the fall in payrolls since October has been driven by payroll-tax hikes.
• 35K of the payroll drop likely reflects mismeasure-ment, as workers switch to self-employed status.
• Job growth should ease as firms complete their adjustment to the tax hikes.

22 July 2025 US Monitor State-level payrolls cast further doubt on a migrant exodus

• BLS data suggesting the foreign-born workforce is already rapidly shrinking look implausible.
• Sector-level payrolls in California and Texas suggest most undocumented workers remain in their jobs.
• A bird’s eye view of employment growth in the other 48 states and DC tells a similar story.

22 July 2025 LatAm Monitor Colombia's recovery continues, but fiscal storm clouds are gathering

• Consumer-driven momentum and services strength supported Colombia’s Q2 growth, but industry lags.
• The fiscal deficit is on track to breach 8% of GDP, with no credible correction in sight.
• Disinflation is set to resume in Mexico and Brazil, but structural pressures and trade risks persist.

22 July 2025 China+ Monitor Japan faces political shift; Korea navigates export risk and trade talks

• Japan’s Upper House election is done and dusted; the coalition has now lost its majority in both houses.
• July’s 20-day exports held up on a WDA basis, despite the higher tariffs applied to Korean exports to the US.
• A preliminary US-Korea trade deal may be reached before August 1, but anything agreed will be general.

22 July 2025 UK Monitor The UK has an inflation problem; expectations are deanchoring

• Sticky wage and price gains are being caused in part by falling MPC credibility.
• Household inflation expectations sit higher than their relationship with inflation implies, and are still rising.
• The UK is an outlier in Europe, where inflation expectations seem to have behaved much better.

18 July 2025 US Monitor Clearer signs of tariff-induced weakness in June retail sales volumes

• The modest gains in nominal retail sales in June were boosted by price rises; sales volumes were stagnant.
• Real consumption likely rose by just 1½% in Q2 and is on track for even slower growth in Q3.   
• The cost of new tariffs has so far been borne entirely by US importers, rather than foreign exporters. 

18 July 2025 LatAm Monitor Colombia holding up as consumers spend and manufacturing rebounds

• Retail and industrial data in Colombia point to a broad-based recovery, despite political volatility.
• A stronger COP, easing inflation and resilient job market are fuelling durable goods consumption.
• Mr. Petro’s proposals, tax reform and external risks still cloud the investment outlook heading into 2026.

18 July 2025 China+ Monitor Japan's exports slide in June, raising risk of technical recession

• Japanese export growth was surprisingly weak, because of a drop in shipments to Taiwan and Canada.
• Japan’s economy has probably entered a technical  recession in Q2, likely dragged down by net trade.
• The LDP coalition is at risk of losing its Upper House majority; this will be bond-and yen-negative.

18 July 2025 UK Monitor Job falls easing, and pay growth too high for 2% inflation

• Surprise! Payrolls were revised to show jobs falling less than half as much this year as previously thought.
• The payrolls trend is improving, and surveys suggest job falls are ending, while pay growth is proving sticky.
• We reluctantly bring forward our rate-cut call to August, from November, but it’s a ‘one-and-done’.

17 July 2025 UK Monitor Most of June's CPI inflation rise was genuine

• Food, a motor fuels base effect and unwinding clothes discounting drove up June CPI inflation to 3.6%.
• We think the inflation surprise represents genuine news rather than noise that will unwind in July.
• We raise our forecasts, now expecting CPI inflation to average 3.6% in H2, up from 3.5% previously.

17 July 2025 Emerging Asia Monitor BI's surprise July cut to be followed by at least two more by year-end

• Bank Indonesia surprised the thin consensus for a  hold yesterday with its fourth 25bp rate reduction…
• …We continue to see an end-2025 rate of 4.75%, especially given BI’s rising anxiety over loan growth.
• Indian net exports were grim in Q2, even with US front-loading, but this won’t be seen year-over-year.

17 July 2025 LatAm Political Update Tariffs meet domestic political crosswinds

• Brazil —US tariffs rattle the outlook
• Mexico —  Tariffs test Ms. Sheinbaum’s resolve
• Chile — Bracing for copper tariffs

17 July 2025 US Monitor PPI data show tariffs are inflationary, but only for goods

• PPI and CPI data collectively point to a 0.28% increase in the June core PCE deflator; tariffs mostly to blame.
• The core PPI was unchanged partly due to a plunge in prices charged for accommodation, which are volatile.
• Announcing a shadow fed Chair is a bigger risk than removing Mr. Powell immediately from his post.

16 July 2025 US Monitor Tariff-related price hikes hit in June, with worse to come in July

The June rise in core goods prices, ex-autos, was the biggest in three years; import-sensitive prices leapt...

...But only a quarter of the tariff costs has come through so far; expect even bigger price rises in July.

CPI services inflation will continue to cool, but it will offset only about half the pick-up in goods inflation.