- 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 aggregate DPI is a poor guide to CPI core goods prices, but some components are well correlated.
- The useful component DPIs point to no step up yet in the pace of goods price rises in response to tariffs.
- A very low response rate to NFIB’s survey casts doubt over the May rebound in small business confidence.
Samuel TombsUS
- 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
In one line: Japan's manufacturing PMI rose as US importers rushed orders ahead of Tariff reprieve expiry.
Kelvin Lam (Senior China+ Economist)Global
In one line: Japan's services sector expands at a slower pace in May
Kelvin Lam (Senior China+ Economist)China+
In one line: Japan's manufacturing PMI rose as US importers rushed orders ahead of Tariff reprieve expiry.
Kelvin Lam (Senior China+ Economist)China+
In one line: China's monthly exports rebounded in May, thanks to tariff reprieve.
Kelvin Lam (Senior China+ Economist)Global
In one line: China's monthly exports rebounded in May, thanks to tariff reprieve.
Kelvin Lam (Senior China+ Economist)China+
In one line: China’s FX reserves rise modestly as bond revaluation offsets inflows
Kelvin Lam (Senior China+ Economist)China+
In one line : China's services activity ticks up, but deflationary pressure still lurking in the background.
Kelvin Lam (Senior China+ Economist)China+
In one line : Japanese inflation continues to outpace labour earnings; BoJ likely to hold rates in June.
Kelvin Lam (Senior China+ Economist)China+
IGNORE THE STAMP-DUTY-INDUCED PULLBACK...
- ...HOUSE PRICES WILL STILL GAIN 4.5% IN 2025
Rob Wood (Chief UK Economist)UK
- We think the core CPI rose by 0.3% in May, but a 0.2% increase looks more likely than a 0.4%.
- Indicators point to a moderate step up in the pace of core goods price rises; the surge is coming from June.
- Discretionary services prices likely were soft again, while the seasonals will pull down other services prices.
Samuel TombsUS
- Taiwan’s exports surprised in May, rising 38.6%, up from 29.9% in April; the front-loading continues…
- …This will likely mean the central bank holds back on easing when it meets next week.
- Thai deflation likely hit a low in May, but the strengthening THB could lead to its return next year.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
- China’s intensifying producer deflation in May reflects soft energy prices, rather than any direct tariff impact.
- Lacklustre core consumer inflation is indicative of still- sluggish domestic demand.
- Policymakers are likely to stick with targeted support, as they gradually implement demand-side reforms.
Duncan WrigleyChina+
- EZ compensation per employee growth slowed in Q1, in line with easing negotiated wage growth.
- Other measures out in the coming days are likely to also show slower wage growth in Q1.
- We suspect wage growth will now plateau in the 2.5%-to-3.0% range, remaining historically high.
Melanie Debono (Senior Eurozone Economist)Eurozone
- We expect CPI inflation in May to slow to 3.4%—close to rounding to 3.3%—from 3.5% in April.
- A correction to Vehicle Excise Duty and airfare falls will be partly offset by strong food and clothes prices.
- May’s CPI inflation will likely match the MPC’s forecast, and services inflation will slightly exceed it.
Rob Wood (Chief UK Economist)UK
Producer deflation slammed by weakening international energy prices, weather-hit construction activity
Duncan WrigleyChina+
