fiscal stimulus

Germany’s Economy: Three Years of Stagnation With Only Limited Signs of Recovery

Same old story: Germany’s longest stagnation has now been confirmed. The economy will remain stuck until fiscal stimulus begins to take effecta

Japan: Large Fiscal Stimulus to Boost Growth and Curb Inflation, JGB Pressur

Japan's stimulus package targets inflation stabilisation, strengthening defence and diplomacy, and sustainable growth. It should spur short-term growth and reduce inflation, but may put pressure on JGBs. The BoJ's policy normalisation will likely continue, though it faces challenges and may proceed at a slower pace

USD Outlook: Fed Cuts Delayed, Euro and Yen Monitor Stimulus and Intervention

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

Eurozone Rates Show Resilience Amid Equity Volatility

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

Bank Indonesia Holds Rates as Rupiah Weakens, but Easing Cycle Still Expected

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

German Economy Braces for Prolonged Stagnation Despite Fiscal Stimulus

The Ifo index increased in October on the back of improving expectations, while the current assessment worsened once again

Bank of Korea Likely to Resume Rate Cuts in Early 2026 Amid Housing Market Uncertainty

The Bank of Korea kept its benchmark rate steady at 2.5%, signaling a shift toward a less dovish policy stance. For the second consecutive meeting, one member dissented, while a growing number prioritised financial market stability over economic growth

Italy’s Industrial Production Contracts Sharply, Weighing on Q3 Growth Prospects

August’s Italian production numbers suggest that a hoped-for timid improvement in the third quarter has not materialised. While some caveats should apply when dealing with summertime data, it would seem the onus now lies with a growth in services

Germany’s Industrial Output Collapses: A Harsh Reminder of Structural Weakness

Extremely disappointing industrial data in August has just increased the risk of yet another quarter of contraction for the German econom

Germany Inflation Rises to 2.4%, But Deflation Risks Loom

Headline inflation has increased to its highest level since the spring, but other German macro data published today suggests that inflation will not be the economy's biggest problem in the months ahead

Germany’s Ifo Slump: Optimism Fades as Fiscal Stimulus Meets Political Gridlock

Even without ground control calling, German optimism has been brought down by a mix of US tariffs, a stronger euro and the political inability to combine fiscal stimulus with growth-enhancing reforms

German Yields Near 2% as Markets Reassess ECB Cuts and US Curve Steepens

Eurozone optimism has pushed the German two-year yield to the brink of pre-'Liberation Day' levels. Just shy of 2%, the balance of risk is towards near-term lower yields again. US rates are quick to fade the dovish move from last Friday, and we think the back end of the curve will want to test higher still

South Korea’s Consumer Sentiment Strengthens for Fifth Consecutive Month

South Korea’s latest fiscal stimulus contributed to improved consumer sentiment and greater growth momentum. But these effects may prove temporary. Even so, the Bank of Korea will stand pat later this week, as it focuses more on housing prices. 

Germany’s Ifo Index Rises, but Fiscal Stimulus Remains the Key to Recovery

The ongoing improvement in business sentiment reflects the strong belief in the healing nature of fiscal stimulus

Germany Back in the Danger Zone: Growth Stalls Amid Tariffs and Stagnation

A full reversal of previous US front-loading effects has pushed the German economy back into recessionary territory, and it looks increasingly unlikely that any substantial recovery will materialise before 2026

USD Eases as Trump’s Tariff Threats Soften Ahead of “Liberation Day”

The US dollar has weakened modestly start the start of this week resulting in the dollar index falling back below the 104.00-level. The main trigger has been Bloomberg report stating that President Trump’s plans for a “Liberation Day” tariff announcement on 2nd April is poised to be more targeted according to aides and allies.

Eurozone at a Crossroads: Navigating Trade War Fallout and Fiscal Firepower

PMI data released today will be closely scrutinised to gauge how the eurozone economy has navigated uncertainty triggered by Trump’s tariffs threats. Besides some sentiment effect, it is too early to assess the impact on the economy of Germany’s bold policy response to recent geopolitical events, with a commitment to heavily invest domestically.

Japan Needs Permanent Fiscal Expansion to Break Deflationary Trap and Revive Investment

Until the corporate savings rate attains a normal negative level and structural deflationary pressures are eliminated, the policy mix of monetary and fiscal policies should maintain the expanding power of the Japanese economy. The increased predictability of firms’ sustained nominal GDP expansion would cause firms to shift their management strategies from cost cutting to investment.

EUR/USD Outlook: Fiscal Stimulus, Policy Shifts, and Valuation Gaps

There is no doubt that Europe’s response to changing US policies has been swifter and more definitive than expected. In isolation, stronger fiscal spending should be a powerful antidote to policy uncertainty and other maladies that have plagued the Euro.

ECB's Tightrope Walk: Easing Rates Amid Slowing Eurozone Growth

Yesterday, the ECB lowered its GDP forecasts for this year and next, confirming a downward trend in forecast revisions.US tariffs and fiscal stimulus in Germany represent opposing risks for GDP trajectory. 

USD Strength Persists Amid Tariff Risks, But European Currencies May Rebound in 2H

• Fresh tariff concerns last week gave the USD renewed support. US data, however, are dimming the near-term economic growth outlook. This combination poses headwinds for pro-growth currencies, in our view. 

• A potential ceasefire in Ukraine, greater fiscal spending in Europe, and country-specific factors should continue to shape European currencies, but clarity on these drivers still remain scarce. 

GBPCHF Outlook. Strong Carry Appeal Amidst Risk-Driven Shifts and Trade Uncertainty

• Following the January dip, the GBPCHF has been testing the upper bound of its trading range over the last six months. We expect the currency pair to stay largely range bound in the coming months.