In today’s briefing:
- UK CPI Trend Extends Excess In July
- EA: Sticky Inflation Survives Euro’s Surge
- India-China Economic Relations: Navigating Massive Imbalances and Strategic Dependencies
- Separate Dividend Tax Plan in Korea: A Push for a 25% Rate for Top Bracket
- Indonesia’s Surprise Summer Rate Cut
- CX Daily: Li Auto Pins Its All-Electric Hopes on New SUV
- New Zealand Extends Dovish Rate Cycle
- Riksbank Holds at 2% Amid Fragile Outlook
- Actinver Research – Macro Daily: Footwear tariffs
- Actinver Research – Macro Daily: Inflation Forecast (1h-Aug)
UK CPI Trend Extends Excess In July
- Another upside surprise in UK CPI inflation extended the accumulated drift to 1.3pp over the past year, yet was only 0.2pp above our old call.
- This outcome matched the BoE’s latest call, with airfares driving the rise, and median pressures holding slightly above a target-consistent pace, so there is less policy impact.
- The MPC was finely balanced in its support for August’s cut, and this rise will not lead dissenters to support past action, let alone another cut, which we still doubt occurs.
EA: Sticky Inflation Survives Euro’s Surge
- Inflation’s surprise stickiness at 2% was confirmed in the Euro area’s final print, with pressures broad based and slightly above a target-consistent pace in most countries.
- There has been little progress in inflation’s latent trend or our persistence-weighted measure, despite the Euro’s substantial and sustained appreciation.
- Without dovish second-round effects, the ECB can look through a potential slowing in headline inflation to a tight labour market and persistent pressures, then not cut rates.
India-China Economic Relations: Navigating Massive Imbalances and Strategic Dependencies
- India’s $101B trade deficit with China highlights strategic economic vulnerabilities across key sectors.
- Regulatory barriers since April 2020 sharply limited Chinese FDI, leading to negligible investments and shelved deals.
- India’s import dependency is profound, spanning pharmaceuticals, electronics, chemicals, and railway components, exposing multiple strategic sectors to supply risks.
Separate Dividend Tax Plan in Korea: A Push for a 25% Rate for Top Bracket
- Democratic Party lawmaker Kim Hyun-jung has introduced a revised Income Tax Act that would lower the top tax rate on dividend income from 35% to 25%.
- Given that this proposal is coming from the ruling Democratic Party, there is a fairly high probability that this could be passed into law in 3Q 2025.
- We provide a list of 28 mid-cap/large cap stocks in Korea with more than 35% dividend payout and 3% or more dividend yield that could benefit from this new proposal.
Indonesia’s Surprise Summer Rate Cut
- Bank Indonesia’s surprise 25bps cut to 5.00% signals proactive easing amid subdued inflation and global uncertainty.
- The Rupiah’s strength and solid capital inflows provide policy space to support domestic growth despite external risks.
- Further cuts are likely this year, contingent on exchange rate stability, fiscal support, and global economic developments.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
CX Daily: Li Auto Pins Its All-Electric Hopes on New SUV
- EVs / In Depth: Li Auto pins its all-electric hopes on new SUV
- Corruption /Exclusive: Ex-IPO regulator found with up to 300 million yuan in cash
- Exports /China’s ‘New Three’ exports power ahead, but trade with U.S. slumps
New Zealand Extends Dovish Rate Cycle
- The RBNZ cut the OCR to 3% in August, matching consensus expectations amid stalled growth and stable medium-term inflation.
- This decision was split, with a minority favouring a larger cut. Further reductions to 2.5% are likely unless inflation surprises persist.
- Weak household demand and global uncertainty may extend the easing cycle, making future rate policy highly data-dependent.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Riksbank Holds at 2% Amid Fragile Outlook
- The Riksbank held its rate at 2% while seeing above-target summer inflation as temporary.
- Weak growth and a fragile labour market sustain rate-cut probability later in 2025.
- The policy outlook hinges on fading inflation pressures, demand recovery, and global risks.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Actinver Research – Macro Daily: Footwear tariffs
- The Mexican government announced a 25% tariff on footwear imports from countries without a trade agreement, aiming to curb unfair competition and protect the domestic industry.
- The measure responds to complaints from the sector regarding the misuse of the Manufacturing, Maquiladora and Export Services Industry Program (IMMEX), created to import raw materials or semi-finished products without paying tariffs or taxes, process them in Mexico, and then export them.
- However, according to the Ministry of Economy, in some cases the program has been used to bring finished footwear into the country and sell it in the domestic market.
Actinver Research – Macro Daily: Inflation Forecast (1h-Aug)
- We expect inflation for the first half of August to stand at 0.08% bw, which would represent an increase in the annual rate from 3.48% to 3.59%.
- Typically, inflation for this fortnight stands at 0.19% bw.
- Our lower estimate is explained by a -1.10% bw decrease in livestock products, compared to the historical -0.27% bw.
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