Sentiment up from the April lows, but small businesses remain under pressure.
Oliver Allen (Senior US Economist)US
- Changes in import prices rarely feed through instantly to consumer prices; brace for a surge this summer.
- CPI services data remain plagued by residual seasonality; expect much faster increases ahead.
- We still expect core CPI inflation to peak at 3½% in Q4, though that won’t stop the Fed easing.
Samuel TombsUS
- 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 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
