In today’s briefing:
- Don’t Swim Naked: TIME TO PUT YOUR SHORTS ON!
- BoE Closer To Slowing Cuts
- The Drill – The Gold(en) Era Continues!
- The Polycrisis Era (2025–2028): Navigating a World of Overlapping Disruptions
- CX Daily: China Unveils Monetary Support to Stem U.S. Tariff Impact
- Malaysia: Policy Rate Held At 3.0% (Consensus 3.0%) in May-25
- Sweden: Policy Rate Held At 2.25% (Consensus 2.25%) in May-25
- Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 9 May 2025
- [IO Fundamentals 2025/18] Policy Easing and Trade Diplomacy: China’s Coordinated Economic Push
- Norway: Rates Held At 4.5% (Consensus 4.5%) in May-25
Don’t Swim Naked: TIME TO PUT YOUR SHORTS ON!
- The bear market rally in the US stock market continues as investors try to justify the tariffication of global trade and ignore its economic consequences. A FREE LUNCH.
- Soft and hard economic indicators in the US are falling, with some alarming numbers in the travel industry.
- US companies face potential blowback from Chinese consumers that provide 7% of S&P revenue.
BoE Closer To Slowing Cuts
- The shockingly divided MPC’s offsetting votes weren’t the most hawkish signal alongside its 25bp rate cut. Most of the five backing it were only recently convinced.
- Maintained guidance for a gradual and careful approach not only disappoints dovish hopes, but signals a 5:2:2 bias between a slower, constant and faster pace of cuts.
- We still expect this gradualism to help the BoE resist cutting in August (and June) while waiting for dovish evidence that never emerges, making this the last cut.
The Drill – The Gold(en) Era Continues!
- Greetings from Copenhagen.
- There’s plenty of geopolitical tension to unpack this week, with three major developments over just the past few days: 1) an Indian attack on Pakistan, 2) new events in the Middle East, and 3) the launch of U.S.–China trade talks.
- India attacked Pakistan in the Kashmir region overnight, and Pakistan swiftly retaliated.
The Polycrisis Era (2025–2028): Navigating a World of Overlapping Disruptions
- Geopolitical fragmentation accelerates, replacing global integration with regional blocs and bilateral arrangements.
- Resilience supplants efficiency as the organising principle for economic planning, supply chains and governance.
- Complexity and discontinuity are here to stay. Success may belong not to those who predict the future, but to those who prepare for a range of plausible futures.
CX Daily: China Unveils Monetary Support to Stem U.S. Tariff Impact
- Autos /In Depth: U.S. tariffs rattle global auto industry
- China-U.S. /: China, U.S. to hold trade talks in Switzerland this week
- Law /: China revises infectious disease law to better protect individual rights
Malaysia: Policy Rate Held At 3.0% (Consensus 3.0%) in May-25
- Bank Negara Malaysia held its official policy rate at 3%, in line with consensus, maintaining a supportive stance amid resilient domestic demand and heightened global trade tensions. The decision reflects concern over downside risks from external uncertainties and weaker global sentiment.
- Headline and core inflation remained subdued in Q1 2025, at 1.5% and 1.9% respectively, with the outlook deemed manageable due to easing global cost pressures and limited domestic demand-pull inflation. Inflation risks remain externally driven, linked to commodity markets and trade policies.
- The ringgit continues to be influenced by external volatility, though Malaysia’s structural reforms and narrowing interest rate differentials lend support. Future rate decisions will depend on the trajectory of inflation and the balance of risks to growth amid an uncertain global environment.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Sweden: Policy Rate Held At 2.25% (Consensus 2.25%) in May-25
- The Riksbank held the policy rate at 2.25%, in line with expectations, citing a well-balanced monetary stance amid elevated inflation and softening growth prospects.
- Although inflation remains somewhat high, the Riksbank views this as temporary and now considers downside risks to inflation more likely than upside ones, suggesting a potential easing bias.
- External uncertainty, driven by US trade policy and geopolitical tensions, plus falling household confidence domestically, are key factors likely to influence the interest rate path.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 9 May 2025
China’s shift to consumption-led growth would boost domestic services, not global imports, challenging Western expectations.
Most Asian economies showed contracting manufacturing activity in April, reflecting broader global slowdown signals.
Trade data is distorted by pre-tariff stockpiling; focus should remain on fixed asset investment trends for clarity.
[IO Fundamentals 2025/18] Policy Easing and Trade Diplomacy: China’s Coordinated Economic Push
- Chinese officials unveiled a broad set of economic support actions, including rate reductions and substantial liquidity infusions, as part of intensified efforts to cushion the economy from U.S. trade tensions.
- Top U.S. and Chinese officials will meet in Switzerland from May 9–12 to ease trade tensions, boosting investor sentiment and driving iron ore futures to a near two-week high.
- China’s factory output contracted in April, with both the official NBS and Caixin PMI reports showing a decline in manufacturing activity amid weakening foreign demand.
Norway: Rates Held At 4.5% (Consensus 4.5%) in May-25
- The Norges Bank held its policy rate at 4.5% in May, consistent with consensus and March guidance, citing persistent inflation and heightened global uncertainty as reasons to maintain a restrictive stance.
- Although inflation has eased, underlying pressures remain strong, with CPI-ATE stable at 3.4% and a weaker krone raising imported goods prices, complicating the timing of future easing.
- The Committee continues to signal a likely rate cut in 2025 but flagged increased trade barriers and divergent global developments as factors that could shift the policy trajectory in either direction.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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