Our research

FX Weekly - Rate spreads drive the euro

More negative German–US yield spreads continue to weigh on the euro versus the dollar. Markets are pricing in more Fed and ECB rate increases than we expect. Fiscal and political uncertainty in France is adding pressure on the euro. We expect limited further EUR/USD weakness and maintain our end-2026 forecast at 1.15.

Climate Economics & Energy Research - Forget about the Netherlands’ 2030 climate targets

The decline in greenhouse gas emissions in the Netherlands virtually stalled in 2024 and 2025. The new Jetten government aims to put emissions back on a downward trajectory, but its policy measures are unlikely to have a material impact before 2030, making a substantial overshoot of the 2030 target very likely. The EU’s 2040 target is also likely to be missed by a wide margin, as the pace of emissions reductions is expected to slow after 2030. Recent policy proposals, including the revision of the EU ETS and the Dutch plans for agriculture, nature and nitrogen emissions, are also likely to affect the emissions trajectory through 2040, with the balance of risks tilted towards higher emissions. The probability of meeting the binding EU targets for final energy consumption and renewable energy in 2030 is also very low.

Rates Strategist - France: More than fundamentals priced-in

Current OAT-Bund spreads imply investors are pricing more than just a severe deterioration in France's fiscal outlook, as evidenced by the sharp rise in the OAT-CDS basis. We create a measure for the portion of OAT-Bund spreads that cannot be explained by (1) common euro-area factors, (2) broader rates volatility and (3) sovereign credit risk, including fiscal sustainability concerns. We show that this unexplained spread component has increased sharply and remained elevated since the June 2024 political shock, marking a persistent shift in France’s spread regime rather than a short-lived market dislocation. Absent a credible catalyst, OAT-Bund spreads are likely to remain in the 130-150bp range, while partial progress to reduce political uncertainty could bring them towards 120-130bp and a return to the post-June 2024 regime consistent with spreads around 105-115bp.

Macro Watch - Global trade and manufacturing keep expanding on AI/tech boom

Global manufacturing PMI climbs to highest level since early 2022. The global AI/tech cycle is lifting all boats. Improvements seen at both the demand and the supply side. Global trade keeps expanding driven by the global AI boom and other special factors. Supply bottlenecks do not show signs of easing.

France: Not yet a crisis, but pressure is building

France’s bond market stress has escalated sharply in recent days. In this first in a series of notes, we lay out the current state of fiscal play, previewing what to expect from the 2027 budget negotiations as well as next year’s presidential election. France faces a toxic combination of rising interest rates, weak growth, political paralysis, and limited room to raise revenues. PM Lecornu has announced a €54bn fiscal effort (1.7% of GDP) with the goal of containing the deficit to 5% of GDP for 2027. Fiscal consolidation is likely to be considerably diluted, but we do expect a 2027 budget to be pushed through in some form this year. Le Pen continues to lead polling for the 2027 presidential election. Despite attempts to convince markets she is a fiscal hawk, generous promises around pensions continue to suggest otherwise.

US Watch - Weak job growth takes off the pressure

Eurozone inflation hits 3 year high; 4%+ by year-end

Eurozone inflation jumped to a three year high of 3.8% y/y in September, up 0.6pp from the 3.2% reading in August. This was a bigger rise than both we (3.6%) and consensus (3.7%) had expected. Energy was by far the biggest contributor, jumping to 18.8% y/y from 14.3% in August. We do not yet have the full details but the rise in energy was likely driven largely by petrol and diesel prices, as well as the more gradual pass-through of higher gas and electricity prices to household energy bills. While we had expected a big jump in energy, the rise was even bigger than our expectations and indications suggest this was driven by earlier pass-through to heating oil from the very elevated wholesale diesel prices at present.

FX Weekly - Higher rates support the dollar

US dollar gained 1.0–2.4% since 17 September against major currencies. Wider US interest-rate differentials have driven the dollar rally. EUR/USD fell by more than 3% from 1.17. The next key downside level is 1.10. Downside in EUR/USD is protected but the upside is constrained. We maintain our EUR/USD forecast of 1.15 for end 2026

Housing market monitor - Better in 2026, sharper cooling in 2027

We expect house prices to rise by 3.8% in 2026 and 2.5% in 2027. The number of transactions falls by 0.5% in 2026 and 5.5% in 2027. The housing market did better than expected in the first half of 2026. But rising mortgage rates and uncertainty are cooling the market. Despite this cooling, we do not expect house prices to fall.

Despite the Iran war, industry growth is picking up again

Conditions for the Dutch manufacturing sector have further improved, according to the Nevi Dutch Manufacturing PMI, which rose from 53.8 to 55.6 in September. Both production and the volume of new orders rose at a rapid pace.