Global Macro Analysis

The latest financial, market & economic analysis

ECB rate hike bets move closer as inflation risks are rising again

The European Central Bank is facing a renewed inflation test as the Iran war pushes energy markets back into focus and revives memories of the region’s 2022 price shock. Governing Council member Peter Kazimir said a policy response may be closer than investors assume, while President Christine Lagarde stressed the ECB will not allow the latest conflict to trigger another damaging inflation spiral across the euro zone.

Weak trade balance reinforces rate hold in New Zealand

Last week, Governor Anna Breman signaled that the economy has room to recover this year without reigniting inflation, reinforcing the central bank’s patient stance. The RBNZ kept its cash rate unchanged and stressed that policy needs to remain accommodative for now. Following those comments, markets sharply scaled back expectations of an imminent hike, with investors now seeing only a small chance of the first increase before December.

2025 was messy — the U.S. economy still grew

Stronger consumer spending and a surge in AI investment powered the American economy through a year marked by tariffs, job cuts and political upheaval.

UK economy edges toward easier policy

UK economy is gradually slowing, with inflation trending lower and the labour market showing signs of stress. While headline prices remain above target, disinflationary trends are giving policymakers room to consider monetary easing, especially if economic slack widens further.

United Kingdom Between inflation and Unemployment

The UK economy is currently caught in a classic squeeze. On one side, the labor market is finally showing the cracks that high interest rates were designed to create. On the other, inflation remains a stubborn guest that refuses to leave quietly, leaving the Bank of England with very little room to maneuver.

US growth is solid as sticky inflation pressures the Fed

The US enters 2026 with growth intact and inflation above target, keeping the Fed in a difficult holding pattern. It’s not a recession backdrop, but an untidy one as political pressure tests data-led policy this quarter.

Gold consolidation paves the way for new highs in 2026

Central bank buying, falling real yields and heightened geopolitical tensions remain the three dominant forces shaping the gold market, supporting prices into 2026 and reinforcing gold’s role as a strategic hedge.

OPEC+ control and geopolitical risk keep oil resilient in Q1

Brent should remain supported in Q1 as OPEC+ actively manages supply and geopolitical tensions keep risk pricing elevated. However, softer demand and improving fuel efficiency are likely to cap rallies, keeping the market rangebound.

Cooling inflation supports steady eurozone growth

The eurozone enters the first quarter of 2026 with cautious optimism. After navigating supply shocks and a period of elevated inflation in recent years, economic growth has stabilised, remaining steady if unspectacular.

BoJ policies and higher yields add pressure to carry trades

Japan’s gradual shift toward policy normalisation, rising government bond yields and a narrowing rate gap are reshaping expectations for the yen and increasing pressure on long-standing carry trades.