- We’re lowering our Q2 GDP growth forecast for France, but lifting it for Spain and Italy…
- …We now think EZ GDP rose by 0.2% quarter-to-quarter, with the risk tilted to the upside.
- Near-term risks are balanced as we prepare to be marked-to-market on our H2 slowdown call.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We reluctantly brought forward our rate-cut call to August, from November, but it’s a ‘one-and-done’.
- Underlying GDP is trending up, retail sales will bounce strongly in June, and payroll falls seem to be easing.
- We continue to expect above-target inflation out to end-2027 after sticky wage growth and inflation data.
Rob Wood (Chief UK Economist)UK
- 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.
Samuel TombsUS
- 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.
Andrés Abadía (Chief LatAm Economist)Latin America
- 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.
Kelvin Lam (Senior China+ Economist)China+
- Headline and core inflation remain on track to support a 25bp ECB rate cut by September.
- The key difference between our and the ECB’s latest forecast is that we see inflation rebounding in Q4.
- The outlook for the ECB is bi-modal; the Bank will stay at 2.0% in 2026 if it holds fire in September.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- 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’.
Rob Wood (Chief UK Economist)UK
Services disinflation is partly countering the tariff uplift to goods prices.
Samuel TombsUS
In one line: Better external sector performance likely to support Q2 GDP due tomorrow
Kelvin Lam (Senior China+ Economist)Global
In one line: Better external sector performance likely to support Q2 GDP due tomorrow.
Kelvin Lam (Senior China+ Economist)China+
In one line: BoK hold rates in July, keeping an eye on trade developments and overheating property market in Seoul.
Kelvin Lam (Senior China+ Economist)China+
In one line: China’s FX reserves rebounded in June on currency and bond revaluation gains.
Kelvin Lam (Senior China+ Economist)China+
In one line : Japanese wage growth is not as weak as it looks, the wage slump was mostly about bonuses.
Kelvin Lam (Senior China+ Economist)China+
In one line: China’s services momentum cools amid property drag and post-holiday blues; Caixin composite PMI signals softer Q2 GDP.
Kelvin Lam (Senior China+ Economist)China+
In one line: Japan's manufacturing PMI rebound on stockpiling activity, but domestic demand softens
Kelvin Lam (Senior China+ Economist)Global
In one line: Korea's 20-day exports rebound in June on front loading ahead of reprieve expiry
Kelvin Lam (Senior China+ Economist)Global
- 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.
Rob Wood (Chief UK Economist)UK
- The EZ goods trade surplus rose in May, but only because imports fell further than exports.
- Our Nowcast model points to upside risks to our forecast for Q2 growth, but it excludes net trade.
- We will update our Q2 growth forecasts on Friday with the EZ construction data for May.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- 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.
Miguel Chanco (Chief EM Asia Economist)Emerging Asia
