Daily Brief Macro: UK: Lending Looks Stimulated and more

• Lending activity is sustaining beyond the levels prevailing before the stamp duty tax hike distortion. Only housing transaction volumes are down, but by less than before.
• New loan rates have fallen by 23bp since then, for a 110bp cumulative fall. New rates are close to the outstanding stock. Many borrowers are refinancing for similar deals.
• Past tightening has broadly passed through, but the strength in broad money growth signals that monetary conditions are settling at a slightly stimulative setting.

• The Riksbank will keep policy rates unchanged at 1.75%, with no further cuts expected and a small probability of a hike in 4Q26.
• The Swedish budget announcement of unfunded reforms totaling 120 billion in additional easing caused Swedish rates to rise and yield curves to adjust.
• The Norges Bank surprised by cutting rates despite strong economic data, with markets pricing in further easing despite the bank’s revised higher rate forecast.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Market sentiment is data dependent, particularly on US economic data, which has been surprising to the upside
• Despite some uncertainty surrounding Fed independence, the overall macro backdrop is conducive for dollar weakness
• FX models are showing lack of conviction in the current environment, with carry trades in FX, including EM currencies, being a popular choice for market participants

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Copper prices surged from around $10,000 to $10,350 per metric ton due to a longer and more severe outage than expected at the Grasberg mine.
• The disruption in production is expected to result in a 200,000 metric ton shortfall in the fourth quarter of 2025 and a further 270,000 metric ton loss in 2026.
• The impact of the supply shortage has flipped the refined copper market from a surplus to a significant deficit, leading to a bullish outlook and a projected price increase to $11,250 per metric ton in the first quarter of 2026.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• India’s markets continue to underperform Asia since our insight last November recommending investors to “Fade the Market”.
• Foreign investors continue to exit the market this year with the largest net outflow since COVID.
• The Trump administration is pressuring India in trade negotiations with reciprocal tariffs (25%), additional tariffs for importing Russian oil (25%), pharma tariffs (100%), and new restrictions on H-1B visas.

• US government shutdown likely, with significant impact on data releases
• US payrolls report delayed by potential government shutdown, expected to show improvement in September
• Nomura’s chief economist for developed markets discusses potential outcome of government shutdown and expectations for US payrolls data

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• US tariff-related uncertainty about future global corporate capital allocation remains elevated, particularly for those entities contemplating the relocation of production sites.  Significant costs and investments are associated with production relocation.
• Companies with a relatively high labour input in the production of low value-added products should find it easier to shift production to lower-cost jurisdictions to mitigate the impact of tariffs.
• China’s pending five-year plan will seek to continue expansion into high value-added segments within the manufacturing sector via elevated research and development spending to reduce reliance on foreign technology.

• We remain intermediate-term bullish on stocks, but the market is at risk of a correction.
• If last week’s weakness is the start of a pullback, short-term trading indicators point to further downside potential.
• Investors should be prepared to buy the dip, but not yet.

• “We’re going to take some of that tariff money and give it to our farmers,” Trump said at the White House.
• Agriculture Secretary Brooke Rollins has said the administration is weighing an aid program, opens new tab modeled after the approach taken by the previous Trump administration, when farmers were given billions to offset losses from a trade war with China.
• Farmers are “for a little while going to be hurt, until it kicks in, the tariffs kick in to their benefit,” Trump said. “Ultimately, the farmers are going to be making a fortune,” he added.

• Crude oil futures opened the week sharply lower as oversupply concerns came back into focus, although a tense geopolitical situation continued to lend some support.
• Front-month Nov25 ICE Brent futures were trading at $67.72/b (2010 BST) versus Friday’s settle of $70.13/b, while Nov25 NYMEX WTI was at $63.22/b against a previous close of $65.72/b.
• Prices eased back from the recent multi-week highs following reports that OPEC+ would continue its unwinding program for at least another month.