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Japan: Recovery in recess

11 August 2015

Chris Scicluna
, 
Emily Nicol
  • The BoJ appears overoptimistic about Japan’s economic outlook and we expect the 2% inflation target to remain well out of reach over the coming couple of years. 
  • But the economic recovery is probably just in temporary recess and we do not expect a return to recession. And we think the BoJ will continue to resist the urge to ease policy further.

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Greece's threat of euro exit has cheated it of a recovery

04 June 2015

Grant Lewis
  • As the money runs out in Athens, signs are that the Greek Government is inching towards a last-minute deal.
  • But the damage done to the Greek economy during the negotiations has been immense.

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Grexit: Avoiding the slippery slope

30 April 2015

Robert Kuenzel
, 
Chris Scicluna
  • The Greek government’s reshuffle of its bailout negotiating team has raised hopes that a deal will be reached to avoid default and euro exit. And that remains our baseline scenario.
  • But not least due to difficult domestic politics and the amateurish nature of the government, the risk of a disorderly end to Greece’s membership of the euro remains significant.

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BoJ: The end of the easy bit?

27 April 2015

Chris Scicluna
  • Contrary to some market participants, we do not expect the BoJ to amend policy this week.
  • An upbeat economic forecast will be used to justify leaving policy unchanged, while the BoJ will fear that the benefits of additional easing might not stack up against the risks.

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UK election: Political risks rising

24 April 2015

Grant Lewis
  • The fragmentation of British politics over recent years makes the outcome of the 7 May election more uncertain than for any since before the war.
  • No single party looks set to win sufficient seats to form a majority government, so some form of multi-party arrangement will be required. And negotiations are likely to take longer than the five days they took in 2010.
  • On balance, a Labour-led administration supported by the SNP and Lib Dems looks to be the most likely outcome. That may result in some near-term financial market volatility, while the post-election political landscape looks likely to be one of heightened political risks whichever of the two main parties leads the new government.

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