Pantheon Publications

7 April 2025 Emerging Asia Monitor GDP downgrades and more rate cuts, in the wake of 'Liberation Day'

• The US ‘Liberation Day’ tariffs have led to cuts of 0.1-to-0.7pp to several of our 2025 GDP forecasts…
• …Vietnam’s outperformance has shrunk materially; India won’t enjoy as much of an import-drop offset.
• We now see the SBV restarting cuts to the tune of 50bp, and have added a fourth cut to our RBI view.

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

7 April 2025 China+ Monitor China's brinkmanship with the US likely aimed at forcing start of talks

• China’s all-out response on Friday to US tariff hikes is likely intended to get US-China talks going soon.
• We have cut our 2025 Japan GDP forecast by 0.2pp to 0.8%, due to the US tariff hikes announced last week.
• The BoJ is even more likely to hold fast on May 1, waiting for clarity, as Japan presses for lower tariffs.

Duncan WrigleyChina+

7 April 2025 Eurozone Monitor Markets, and baseline forecasts, are on the ropes from US tariffs

• The markets’ verdict is clear; trade uncertainty is a disinflationary shock, but we’re not convinced.
• We now think the ECB will cut its policy rate later this month, by 25bp, for a terminal rate of 2.25%.
• A high export ratio for EZ industry means higher US tariffs are a risk; construction is looking better.

Melanie Debono (Senior Eurozone Economist)Eurozone

7 April 2025 UK Monitor Week in review: the tariff war has commenced

• The initial response to US tariffs suggests the barriers are more disinflationary for the UK than most.
• Markets are understandably pricing downside growth tail-risks and the UK avoiding retaliation, for now.
• But we continue to think this tariff fandango will eventually prove to be a stagflationary shock.

Rob Wood (Chief UK Economist)UK

Global Datanote: Inflation, Switzerland, March 2025

In one line: Holding at a 46-month low, but will rise again soon; Swiss retaliation to US tariff hikes poses an upside risk.

Melanie Debono (Senior Eurozone Economist)Global

EZ Datanote: Inflation, Switzerland, March 2025

In one line: Holding at a 46-month low, but will rise again soon; Swiss retaliation to US tariff hikes poses an upside risk.

Melanie Debono (Senior Eurozone Economist)Eurozone

CHINA+ DATA WRAP 3 April 2025: China's response to US tariff hike

China likely to step up fiscal and monetary policy support, allow weaker RMB, in response to hefty US tariff hike; 
Caixin services activity rises

Duncan WrigleyChina+

PM Datanote: US ADP Employment, March

ADP distracts more than it informs.

Oliver Allen (Senior US Economist)US

4 April 2025 US Monitor Stagnation in GDP is now our base case, after the tariff shock

• The average effective tariff rate will jump to 22%, from 3%, if Mr. Trump follows through on his plans.
• We now look for a tariff uplift to the core PCE deflator of about 1¼%, half a point more than our prior assumption.
• The outlook for capex and exports is worse too, but fiscal and monetary policy can offset some damage.

Samuel TombsUS

4 April 2025 LatAm Monitor LatAm emerges as a modest trade hedge amid US tariff shock

• USMCA compliance shields Mexico, for now, as tariff risks shift to non-aligning sectors.
• The US tariff war creates winners in LatAm, as Asia bears the brunt, but collateral damage is a threat.
• Faltering sentiment and tight financial conditions are weighing on Brazil’s industrial sector.

Andrés Abadía (Chief LatAm Economist)Latin America

4 April 2025 China+ Monitor China has options, albeit limited, to counter the steep US tariff hike

• China will seek to prop up domestic demand in response to the US tariff hikes…
• …But this won’t mitigate the hit to growth fully, so we cut our 2025 GDP growth forecast by 0.4pp, to 4.0%.
• Serious trade talks are likely to get underway soon, but the US is unlikely to roll back the tariff hikes fully.

Duncan WrigleyChina+

4 April 2025 Eurozone Monitor US tariff hammer falls; what next in the EZ and Switzerland?

• Look through the noise to see a relatively modest US tariff package for the EU, all things considered. 
• An ECB rate cut later this month is now fully priced in, but we still think the Bank will hold fire. 
• The SNB can hold off from further rate cuts for now, despite the likely hit to growth from the US tariff hike.

Claus Vistesen (Chief Eurozone Economist)Eurozone

4 April 2025 UK Monitor Initial small hit to growth just the start of the tariff tango

• We assume a 10% tariff on UK goods exports to the US lowers 2025 UK GDP growth by 0.2pp.
• But strengthening growth in services—immune from tariffs—shows that UK growth can hold up.
• Strong domestic price pressures will keep the MPC cautious; we still expect two more rate cuts this year.

Rob Wood (Chief UK Economist)UK

PM Datanote: Industrial Production, Brazil, February, 2025

• In one line: Reduced confidence and tight financial conditions are drags.

Andrés Abadía (Chief LatAm Economist)Latin America

Global Datanote: Manufacturing PMI, ASEAN, March

• In one line: The nascent improvement is far from comprehensive.

Miguel Chanco (Chief EM Asia Economist)Global

PANTHEON EM ASIA DATA WRAP 2 April 2025

The nascent improvement in ASEAN manufacturing is far from comprehensive

Miguel Chanco (Chief EM Asia Economist)Emerging Asia

UK Datanote: U.K. Nationwide House Prices, March 2025

• In one line: Stamp duty changes halt house price inflation in March, but it will accelerate again.

Rob Wood (Chief UK Economist)UK

UK Datanote: UK Final Manufacturing PMI, March 2025

• In one line: Tariffs will keep manufacturing output falling for the forseeable future.

Rob Wood (Chief UK Economist)UK

PM Datanote: US ISM Manufacturing Survey, March

Tariff uncertainty is weighing on manufacturing.

Oliver Allen (Senior US Economist)US