Daily Brief Macro: ECB: Less Downside From The Good Place and more

• Downside activity risks have reduced, while the inflation outlook holds steady, keeping the ECB in its “good place” despite an implied shift up in the balance of risks.
• Upside risks while inflation is seen settling at 2% would imply a hawkish bias, which the ECB isn’t ready to convey. But the skew may have swung within insignificant margins.
• We still expect no more ECB rate cuts this cycle. If underlying inflation fails to slow as hoped, the ECB’s balanced bias could easily break into a hawkish one in 2026.

• Ueda signals near-term tightening: BoJ Governor Ueda indicated that the next rate hike could come soon, as the Bank awaits only “initial indications” from the 2026 spring wage negotiations. 
• Timing points to December or January: Our main scenario for the hike to 0.75% is January 22-23 in 2026, but we attach some possibility, 20-30% to December 18-19 in 2025.
• U.S. risks remain the key wildcard: A sharper-than-expected U.S. slowdown could delay it, but Absent that, BoJ will hike soon, followed by gradual rise to 1.5% by late 2027. 

• The BOJ held rates at 0.5% as expected, with a 7-2 vote showing continued division. A December hike is now priced at 50-55%, down from 68% pre-Takaichi.
• Inflation forecasts are unchanged at 2.7% (FY25), 1.8% (FY26), with sluggish underlying price growth and downside economic risks delaying tightening.
• Wage sustainability and trade policy uncertainty dominate the outlook. 2026 labour talks and corporate profit trends will determine the rate path timing.

• A divided FOMC cut by 25bp as expected, but Powell signalled Dec’25 cut was far from a foregone conclusion; instead the FOMC was strongly committed to returning to 2% inflation. 
• US$88.8bn decline in base money (Mar-Aug’25) has held M2 and inflation in check. The end of QT from Dec’25 will be a form of easing, precluding rate cuts until Jan’26. 
• FOMC voting shows doves isolated, and Powell-led FOMC will stay hawkish until Jan’26, especially amid fogginess on inflation data. The next rate cut is unlikely until Mar’26. 

Semiconductors /In Depth: Chip Foundries Kick Off State-Backed Consolidation Drive

China-U.S. /Xi to Meet Trump in South Korea to Discuss Bilateral Ties

Restructuring /Exclusive: Suning’s $28 Billion Restructuring Plan Tests China’s Approach to Corporate Failure

• Crude oil futures were higher Wednesday after a steep draw in US oil inventories, but more broadly investors were monitoring sanctions on Russia and the upcoming OPEC+ meeting.
• Front-month Dec25 ICE Brent futures were trading at $64.98/b (2020 BST) versus Tuesday’s settle of $64.40/b, while Dec25 NYMEX WTI was at $60.53/b against a previous close of $60.15/b.
• Markets initially steadied after the American Petroleum Institute reported that US crude stocks retreated by 4 million barrels, while gasoline inventories slumped 6.3 million barrels and distillate tanks drained 4.4 million barrels in the latest reporting cycle.