June Economic Update: Hope returns despite the huge challenge ahead

Why we don't expect negative rates in the US... yet

While President Trump likes the idea of negative interest rates, it's clear the bar is set relatively high for the Federal Reserve to adopt them. We…

China: Mixed messages from the central bank

The People's Bank of China has sent mixed messages about its monetary stance. Here's what we expect for June

Dollar hoarding: It’s hard to let go

As the dollar bear trend starts to gain momentum, questions will be asked about all those dollars hoarded in March - an exercise associated with an 8%…

Eurozone's periphery in peril

The initial shock to the eurozone economy from the Covid-19 pandemic was symmetric as all countries went into lockdown roughly around the same time. But…

Brexit: Four scenarios for trade talks and UK markets

We still narrowly expect the UK and EU to sign a free-trade agreement this year, albeit a basic one. But the chances of an extension to the transition…

Rates: Why the yield curve should do its own thing

The best-case scenario would be no yield curve control. The Fed sets the funds rate and engages in quantitative easing rather than moving rates into…

Eurozone: Bottoming out

With the easing of the lockdown measures, growth is picking up in the eurozone albeit very gradually. Additional fiscal stimulus is being put in place but…

Central and Eastern Europe: The worst seems to be behind us

CEE economies are bracing themselves for a slow recovery. But as unemployment is set to rise and high inflation isn't an issue any longer, more…

Eurozone: Debt monetisation by stealth

While the ECB is not allowed to monetise debt formally in the wake of the Covid-19 crisis, there seems to be some scope to do so, without fear of…

Asia Ex-China - still slowing

The release of May Purchasing managers indices provides a helpful snapshot of where Asian economies stand following the sharp declines in April, which…

Stagflation - not coming to an economy near you

Some analysts suggest that the pandemic and lockdowns will lead to a return to stagflation, last seen in the 1970s and very early 1980s. We don’t…