Something quite unusual has been happening to me over the past few weeks: I am losing my words. I lose my words in the absurdity of the news flow. I simply don't know what to say or how to express myself while staying polite. And every week, since the year began, has kicked off with abnormal news.
EM currencies are generally ending the year on a strong footing – enjoying the benefits of lower core policy rates, a modestly weaker dollar and many offering high carry. There is a lot of focus on the renminbi at the moment and whether China's $1tr trade surplus will drive the renminbi much stronger. For today, the focus is on US jobs and eurozone PMIs
A 25bp cut is practically certain. It's 90% discounted. Not delivering is not really a viable option, given the way the Fed behaves. But, expect a hawkish cut, with a pause to be heavily intimated for the January meeting. It will be interesting to see next Fed liquidity management steps; likely they will need to buy more bills than the MBS roll-off requires
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Global supply chain problems and geopolitical concerns may have triggered debate among businesses about reshoring production closer to home, but the numbers tell us a different story. Reported euro area reshorings have steadily declined after being surpassed by offshorings in 2019, suggesting global supply chains remain deeply integrated
The UK government's budget announcement will need to show fiscal discipline to satisfy gilt investors, and while our baseline sees enough credibility to nudge the risk premium in gilt yields lower, we are well aware of significant upside risks too. Foreign gilt investors are relatively important and could even gain in importance in the future
Intuitively, a deal with Russia would help euro rates higher, but falling gas futures are already pushing down the curve through lower inflation expectations. Tensions with Russia are likely to stay, which means risk sentiment should remain fragile
Buoyant economic growth and signs of recovering investment are paired with slowing wage dynamics, easing upside risks to the current disinflation trend. With CPI inflation approaching the National Bank of Poland's target, the central bank may continue with policy easing. We expect another 25bp rate cut in December
The week draws to a close on a positive note after a significant selloff in risk assets as US rate cut bets continued to decline from the Federal Reserve's December meeting.
Oil prices are under renewed pressure amid ongoing peace talks to end the war in Ukraine
The composite PMI remained broadly unchanged in November (52.4 compared to 52.5 in October), which is well above the neutral level of 50. This suggests that growth in the short run remains decent despite significant global headwinds
French business confidence and PMI indicators edged higher in November, driven by renewed optimism in the service sector. This rebound could support growth in the coming months, despite more mixed signals from industry
It could have been a lot worse for EUR/USD this week. A set of FOMC minutes that poured cold water on a December rate cut and a strong headline rise in the US jobs report could have seen 1.1500 taken out again. But instead, investors seemed to have just delayed rather than abandoned pricing for Fed easing. And Europe may still being showing some signs of life
Euro rates are more focused on the improving macro story than on AI-driven equity jitters. This also means that Bunds may not prove an effective hedge against an equity sell-off
Japanese data shows inflationary pressures are firm and that exports remain resilient despite tariffs. An upbeat flash purchasing manager’s index suggests the economy is on the recovery path. While these outcomes favour a Bank of Japan rate hike in December, government pressure to keep policy loose might delay a move until next year
US jobs growth was stronger than expected in September, but unemployment also rose amid workers returning to the labour market and seeking jobs. Given the Fed's recent hawkish shift and the lack of official data scheduled before the 10 December FOMC meeting, it is understandable that the market thinks the next move won't come until early 2026
As negotiations to reach a final Omnibus I proposal have started, we analyse the impact each proposal would have on European banks. Despite the variations, all three proposals suggest a single path towards major scope reductions. This would be a positive for banks no longer required to report on ESG but complicate disclosures for those still in scope
Bank Indonesia held its policy rate at 4.75% amid inflation pressures and rupiah weakness, but we expect a cut in December to support growth. Risks remain skewed toward delays if currency pressures persist or the Fed postpones easinga
Equities jitters have helped to steepen curves, though all within prior ranges and a 10y UST yield above 4%. As 10y Bunds richen versus swaps, the swap rate remains near the upper end of its range while the back end is sensitive to Dutch pension fund news. Meanwhile, latest TIC data show decent buying of US assets, including foreign demand for Treasuries
Gilt yields jumped after reports the UK government was scrapping plans to raise income tax, casting fresh doubt over how a £30bn gap will be plugged. We expect about half to come from upfront tax hikes, so yields may not climb much further. If we’re wrong, blame the politic
The souring in risk sentiment before tomorrow’s Nvidia earnings is hitting high-beta currencies and offering some support to the dollar ahead of Thursday’s September jobs reports. The yen is being held back by escalating tensions between China and Japan, as well as soft data and speculative flows testing the intervention threshold
The drop in USD this week seems to be linked to expectations that US data will come in soft. But hearing Fed speakers, the move seems a bit premature, even if it looks like we could get September payrolls data soon. In the UK, the government is scrapping its income tax hike plans. GBP downside risks have suddenly increased
Bank Indonesia and the People’s Bank of China are both expected to maintain current interest rate levels. Key releases include Japan's GDP, trade figures, and inflation, Taiwan's export orders and Singapore's GDP
China's key activity indicators continued to slow across the board in October as policymakers appear to be delaying further policy support. This year's growth target is likely to require minimal additional support to be reached, but supportive policies will be necessary to achieve long-term goals
The carry trade suffered a stress test yesterday, when one popular target currency, the Hungarian forint, had to cope with prospects of wider budget deficits. After selling off 0.7%, the forint is already coming back bid. With volatility expected to stay low, it's hard to see any major unwinds of carry strategies in the near term
We think markets are right to price in more Bank of England easing, but the upcoming budget on 26 November can still bring both bullish and bearish surprises. Meanwhile, concerns around the US job market are offsetting the positive impact of a likely government reopening on risk sentiment
It has been a mixed week for the dollar, where early-week strength finally eased a little yesterday on indications of softer US jobs data. Yet with the US government shutdown ongoing, we are still in the dark about the true labour market picture. Expect more $ consolidation and focus on regional stories such as soft China trade data and the Canada jobs release
China's deflation is expected to continue, while the government releases data on retail sales, fixed asset investment, and industrial production. South Korea will release the unemployment rate
It's the expected rebound in industrial production in September. However, it's a rebound which is too weak to mark any turnaround. Instead, even with some cyclical rebound in the making, structural weaknesses will put a lid on German industrial production for a while
In our latest update, we reassess our Hungarian economic and market forecasts at a time when we are still waiting for the end of stagnation and hoping for better days to come. The economy is starving for those order book fillings, and also a big dollop of extra confidence
EUR/USD continues to grind lower as it has for the last week. Rate differentials have not moved much at all this week and in fact have been mildly supportive for EUR/USD.
The ISM manufacturing index suggests that the US industrial sector remains under pressure from weak growth and tariff-related uncertainty. The one consolation is that inflation pressures appear to be easing, but the Fed hawks will want to see broader evidence of this before backing a December rate cut
Conditions in manufacturing have deteriorated for the fourth consecutive month, which can undoubtedly be viewed as a negative signal for the economy when looking ahead. Although below the expansionary threshold, the PMI is nowhere near the depressed 2023 levels. Should the hard times continue, an adverse effect on growth in 2026 is a possibility
The Bank looks likely to keep rates on hold on 6 November, despite better inflation and wage news. The committee is deeply divided, and we don't expect clear signals on the Bank's next steps. But assuming the Autumn Budget goes as expected, a December rate cut now looks more likely than not
The dollar remains bid as the market continues to question whether the Fed needs to cut rates to 3.00/3.25% after all. Also helping the dollar may be tight money market conditions as the US Treasury restocks its cash balances. In the absence of official data, the focus this week will be on insights into the US job market from private sector releases
China’s manufacturing purchasing managers’ index saw a broad-based decline in October, while the non-manufacturing PMI managed to edge back into expansionary territory. Industrial activity has held up well despite soft PMI data year-to-date. Even so, this steeper downturn may raise some concerns
Improving eurozone hard data and a stable ECB mean the EUR swap curve should steepen from here. The complexity of estimating Dutch pension reform flows doesn't help the case for a steeper 10s30s. In the US, Treasuries are trading heavily in post-FOMC, and look like they can attempt to continue to do so
Spain’s economy grew by 0.6% over the third quarter, following a robust second quarter, as external demand weakened. With signs of cooling in industrial activity and tourism, growth is expected to normalise over the coming quarters and into 2026
The US remains in a steady state along the coupon curve. But there’s a lot going on in the money markets pipes as repo tightness persists. As we head into the Federal Reserve meeting, the big call would be to maintain the MBS roll-off and replace it with buying of T-bills, while broadly ending quantitative tightening
The dollar is a little weaker across the board in quiet trading conditions. The yen is outperforming on some very mild verbal intervention from Japanese authorities - but hardly enough to drive a sustainable trend. In a market deprived of US data by the government shutdown, there may be more focus than usual on reports that Amazon plans to cut 30,000 jobs
Upside inflation risks are receding while worries about the jobs market are mounting. The Federal Reserve is expected to respond with another 25bp interest rate cut on Wednesday, and could also bring QT to a conclusion
Global risk assets are bid on the view that this week's Trump-Xi meeting will be a positive one. A 25bp Fed cut on Wednesday should also help the tone, but that is very much priced in. With the People's Bank of China continuing to fix USD/CNY lower, we favour a mild downside bias to the dollar at the start of the week
Bank lending to the eurozone private sector remained unchanged in September; the pace remains modest. This doesn’t provide much direction on monetary transmission, which so far doesn’t seem to be hindered by large macro uncertainty
The communiqué following China's Fourth Plenum has given markets a first look at the priorities for the 15th Five-Year Plan. The key focus for policymakers looks little changed, as modernisation, innovation, self-sufficiency, and boosting domestic demand feature prominently
Lingering trade-induced uncertainty continues to weigh on Canadian activity and carries risks of broader jobs market deterioration. We expect the BoC to overlook higher-than-expected jobs and inflation data and cut by 25bp on 29 October. The door may be left open to more easing, and CAD should remain vulnerable against most of the G10
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Next week’s ECB meeting is unlikely to leave a lasting impact. The December meeting is the one to watch as chances of a rate cut are still higher than markets currently anticipate
This year's Autumn Budget could be seismic for UK markets. We think it's more likely to push gilt yields down than up, yet there are several ways – from fiscal rule changes to dubious austerity pledges – which could cause borrowing costs to spike
Concerns about the US credit market have eased further since the weekend, prompting a hawkish repricing in the Fed curve and justifying a stronger dollar. EUR/USD may slip all the way to 1.160 in the next few days, but it may require a hot US CPI print to extend the drop. Elsewhere, Japan’s new PM Takaichi was confirmed by parliament this morning
Poland's industrial output surprised positively in September, but the outlook is uncertain as some auto producers plan plant closures and production pauses by the end of 2025. Wage growth in services is easing; employment is falling amid labour shortages. Policymakers may await more data before resuming rate cuts in 2026
Chinese GDP slowed by less than expected in the third quarter amid the boost from external demand. With China on track to hit this year's growth target, we could see less policy urgency. But weak confidence translating to soft consumption, investment, and a worsening property price downturn still need to be addressed
China's discussion of its 15th Five-Year Plan will be a major focus, along with GDP and property price data and a loan-prime-rate decision. The Bank of Korea is expected to leave rates unchanged, while markets will get key data from Japan and Taiwan
The dollar revealed its vulnerability during Friday afternoon’s FX trading. The fear remains that this year's hike in US tariffs will eventually show up in hard data and once again challenge the idea of US exceptionalism. In the ongoing absence of US data, this week will be dominated by central bankers at the IMF meetings and international politics
Seemingly defying a backdrop of high uncertainty even by the ECB’s own accounts, volatility in markets continues to decline. On the surface, it may look like complacency. But a perceived limited upside in rates, and a potentially bigger downside if they were to actually start falling, also gives spreads their backing
Taiwan's export growth has been rather dependent on demand from the US. Fortunately, the tariff hikes in August do not appear to be having a significant impact on Taiwan's exports to the US, at least not yet
Unlike Europe, the US benefits from software and tech companies that generate billions of operating cash flow, which is used to fund the AI investment boom. Therefore, we expect borrowing in Europe to be only opportunistic. Since these firms are not taking on much new debt, the risk of overcapacity is unlikely to affect their creditors
Hungary's September inflation numbers came in flat as expected, but we don't take long-term comfort in that. Price pressures are still far from the central bank’s target. Looking ahead, there is some light at the end of the tunnel. A warning, though: it could be a train
Retail sales added 3.5% annually when adjusted for price effects, coming in above market expectations. Households have enough resources from solid wage growth in the first half of the year. Nonetheless, sentiment will be the key when looking ahead, as the external environment becomes wobblier
Extremely disappointing industrial data in August has just increased the risk of yet another quarter of contraction for the German econom
Despite inflation nearing double digits and real rates staying negative, the National Bank of Romania (NBR) is expected to maintain its cautious stance at its 8 October meeting, prioritising stability amid weakening consumption and uncertain growth prospects
US rates are finding bullish signals in second-tier data as the US government shutdown continues. The second-largest Dutch pension fund is showing confidence about its transition date of 1 January 2026, which should help support the 10s30s steepening. Approval from the regulator, however, has not been explicitly communicated yet
Two major themes shaped today’s market narrative: the looming US government shutdown and surprisingly (but positive) developments out of the Middle East.
On the political front, the White House unveiled a plan during a press conference, aimed at ending the Gaza conflict, stressing that “no one will be forced to leave, and Israel will not occupy Gaza”—a proposal that fueled cautious optimism that the war may be nearing its end.
Gold and silver prices edged higher yesterday, driven by uncertainty surrounding Russia-Nato relations following recent airspace violations, which has kept the risk premium elevated. Continued inflow into precious metal ETFs has provided further support to the complex
Annual growth rates of lending to households and non-financial corporates ticked up in August, which indicates that the economy continues to experience moderate support
This is a follow-up analysis and timely update of our prior report, “Nikkei 225 Technical: Bullish trend remains intact despite Japan’s PM resignation”, published on 8 September 2025.
Consensus for PMI numbers sees a continued growth recovery in the eurozone supporting a drift higher in euro rates. A disappointment in French PMIs, however, could be a trigger for wider French government bond spreads, which we think are still on the tight side. A further recovery of German PMIs would help maintain the current positive market sentiment
The composite PMI increased from 51 to 51.2 in September, indicating that the economy maintained a modest pace of growth in the third quarter
It's tough to envisage a hawkish 25bp cut, else why do it in the first place. A dovish 25bp cut is far more likely. If Chair Powell wants to be hawkish, then better to deliver a 50bp cut. Long rates are in a mood to go along with the "rate-cutting ride" and test lower too. But rate cuts plus (likely) rising inflation present an issue for long dates to deal with ahead
Risk sentiment remains resilient and largely unaffected by factors such as French politics. While this should support EUR rates grinding higher and spreads – outside of France – still tighter, plenty of risks are looming. US rates are another directional driver, and today US data is in focus ahead of Wednesday's Fed decision
In a quiet start to the week for FX markets, EUR/USD is trading steady despite French debt being downgraded on Friday night by Fitch. That downgrade has already been priced into French debt markets, and instead, Wednesday's FOMC meeting is set to be the dominant event for EUR/USD this week. We also have central bank meetings in the UK, Japan, Canada and Norway
Having enjoyed a brief session on Friday of unalloyed joy as Fed Chair Jerome Powell hinted at a September rate cut, financial markets may now face some uncertainty on political developments in France and the US. We're still happy with a bearish story for the dollar, but it might have to be the more defensive Japanese yen or Swiss franc which takes the lead now
Germany’s GDP fell 0.3% q/q in Q2 2025 (0.2 pp below the flash); y/y: –0.2% unadjusted, +0.2% calendar-adjusted. Previous quarters: +0.3% (Q1 2025), +0.2% (Q4 2024). Destatis’ annual revision altered earlier quarters by –0.7 to +0.6 pp.
Our latest ING Consumer Research survey sheds light on what European consumers are worried about – and what they believe governments should prioritise in spending
Chair Powell does not have to pretend to maintain a degree of hawkishness as the recent data in fact supports such a stance. The next FOMC is still a month away; plently of time to pivot. Good eurozone PMIs support the idea of a cyclical upswing, which would put more upward pressure on the belly of the curve as it raises the probability of an ECB hike in 2026
July's macro data bolsters the case for the National Bank of Poland to continue its monetary easing path. Growth in industry remains slow, construction is still stagnant, wage increases have eased, and the employment decline has deepened. We expect a 25bp cut in early September, with the policy rate falling to 4.25% at the end of 2025 from the current 5.00%
Poland’s external current account surplus in June was a positive surprise, as it was also driven by a positive balance in merchandise trade. One data reading does not necessarily signal a new trend – but it may suggest a change in underlying macro developments, especially softer domestic demanda
German 30-year yields are on the rise, with the curve hinting at more to come. German fiscal plans and Dutch pension fund reform are factors in play. The US is in a similar mode, with fiscal and CPI data followed by upward pressure on long yields
The price actions of the Germany 30 CFD Index (a proxy of the DAX futures) have staged a corrective decline of 5% from its current all-time high of 24,655 on 10 July 2025 to 1 August 2025 intraday low of 23,385.
Several key technical elements are now advocating for a potential recovery to kickstart a new impulsive up move sequence within its major uptrend phase.
Markets have opened the week with relatively subdued movements as players brace for tomorrow's major US CPI release.
The Canadian dollar continues to have a quiet week. In the European session, USD/CAD is trading at 1.3732 down 0.10% on the day.
Retail sales increased by 0.3% in June, with the year-on-year growth pace accelerating from 1.9% to 3.1%. This suggests that household consumption is likely to underpin growth in the second half of the year
With South Korean consumer inflation near 2% and GDP projected to rise, the Bank of Korea is likely to wait for clearer signs of housing market stability before easing. We still prefer an October rate cut over August.
Steady inflation confirms that the eurozone is in Lagarde’s “good place” at the moment. Expect inflation to remain around target for the months ahead
The main events of the week will be key data reports from China, Japan, South Korea and Taiwan as economists try to assess trade-war effects across Asia. Also, we expect the Reserve Bank of India to hold interest rates steady
Headline inflation remained unchanged at 2% year-on-year. Looking ahead, German and eurozone inflation are likely to fulfil the ECB's old target of 'below but close to 2%'
The slowdown in energy prices was offset by rising costs in food and certain services, leaving headline inflation unchanged. Given the current subdued economic environment, we expect inflation to hover around current levels, with a temporary deceleration likely
Rates didn't move much in reaction to the EU trade deal. If anything, eurozone markets seemed slightly disappointed by the details. The focus will now be on upcoming data releases. In the US, we have important jobs data this week, which may drive the next rates move. Meanwhile, Dutch pension reforms could leave an important mark on fixed-income markets
Central banks just love to cut rates in gradual, 25 basis-point chunks, don't they? Nobody knows why. And frankly, it doesn’t always make much sense, writes James Smith. Should the ECB cut rates next week? And should the Fed and BoE speed things up?
Passing the new budget through the French parliament may prove difficult and generate more rates volatility. EGB spreads look tight given defence spending ambitions. US Treasuries yields decide to test the upside, and for good reason we think
In May, real wage growth reached its historical average, which appears weak compared to the double-digit increases seen in previous years. This could potentially harm households' perception of their financial situation and, as a result, diminish consumer confidence
At first glance, a 27.3% YoY YTD uptick in aggregate financing looks like cause for celebration, but a closer look shows that this is primarily driven by increased government bond issuance. A much more modest 2.3% YoY uptick in new RMB loans shows that credit demand has remained sluggish despite rate cuts amid weak confidence and heightened uncertainty
The -0.7% month-on-month decline in retail sales coincided with a -0.3% decline in overall services activity in April. While surveys had previously indicated potential weakness in eurozone services for the second quarter, this concrete data confirms our expectations that GDP growth between April and June may have been negative
The President of the National Bank of Poland first called yesterday's cut as an adjustment of rates, not the beginning of a cycle of cuts. Finally, he signalled a September cut with the target rate seen in the range of 3-3.5%. We see a 50 basis point cut in September and a target rate of 3.5% in 2026
The Big Beautiful Bill passed in US Congress, putting even more pressure on the fiscal outlook and thus longer-dated USTs. US payrolls came in better than expected, contributing to higher yields across the curve. The ECB minutes show more members are concerned about undershooting inflation, keeping the 1.75% market-implied landing zone firmly intact
Payrolls day remains the most important one for markets. Even going into most pivotal Fed meetings we typically know what's going to happen. For payrolls, we think we know. And even if we did, the print itself can have a perverse effect. The big fear is we get a really bad one sometime soon. Feeling bullish? Fair. But, weak payrolls also means a higher deficit
FX Daily: Lacklustre dollar support into key events. Yesterday’s US data (JOLTS and ISM manufacturing) were stronger than expected, but this provided only limited support for a dollar still suffering from an asymmetrical negative bias. To watch today: ADP payrolls, Challenger layoffs, the Big Beautiful Bill heading for final House approval and Trump’s tariff threats ahead of the 9 July deadline
Asia week ahead: data to show uptick in inflation in South Korea and Indonesia. CPI data will be released in Indonesia, the Philippines, and South Korea next week. A rise in inflation is expected, driven by higher oil prices. Elsewhere, China is set to release its PMI and new export orders, while Japan will publish the Tankan survey and industrial production data
Retail sales of goods at constant prices increased by 4.4% year-on-year in May (ING: 5.2%; consensus: 4.3%), following an impressive April (partly due to calendar effects), when retail sales growth reached 7.6% YoY, the highest in nearly three years.