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The Week Ahead - 28 April - 2 May 2025
These are the Key Macro Events for the upcoming week.
China - The Art of the No-Deal
Following sharp escalation of US-China trade war in April, a direct export shock to the US is imminent. Exemptions for electronics, trade circumvention/reorientation and more support will mitigate this shock. We lowered our annual growth forecasts for 2025/ 2026 to 4.1% (from 4.3%) and 3.9% (from 4.2%).
Global Monthly - The only certainty is uncertainty
US policy has been erratic, to put it mildly. Tariffs were announced, paused, and then focused on China, but with key exemptions. It is unclear what the Trump administration actually wants. This makes predicting outcomes even harder. With uncertainty the only real certainty, the global – especially the US – economy is the main casualty. But so, increasingly, is the US’s leadership of the global financial system. Spotlight: The US dollar is facing testing times, but the real test is still to come. Despite the pressures it is facing, we still see no viable alternative.
Key views Global Monthly April 25
US tariffs surprised even our pessimistic expectations, and despite the 90 day reprieve for the biggest rises, significant tariffs remain in place. The US has focused chiefly on China, as we had long expected, but the eurozone (and the rest of the world) are still hard hit – by both tariffs and the policy uncertainty. Interest rate cuts and other forms of policy support are a cushioning factor in the eurozone and China, while in the eurozone specifically, defence spending, and in Germany new infrastructure spending will support growth in 2026. Global trade and growth are also initially benefiting from a frontloading of US imports ahead of tariff rises. Still, the nascent recoveries in domestic demand in the eurozone and China face downside risks from weaker confidence, while in the US, demand will be hit by the tariff shock to real incomes. Inflation in the US is expected to reaccelerate, but to fall below target in the eurozone. This is likely to drive a divergence in Fed & ECB policy, with Fed policy staying on hold until late 2026, and the ECB continuing to cut rates.
The Week Ahead - 21 - 25 April 2025
These are the Key Macro Events for the upcoming week.
China enters trade war on solid first quarter
Real GDP growth in Q1 stronger than expected driven by ongoing policy support and trade frontloading. March macro data point to improving momentum just before tariff shock will hit. Growth forecasts under review; we will publish revised growth forecasts in our Global Monthly later this month.
US-China trade war: Twist and Shout
Late Friday evening, the US exempted popular electronics from reciprocal tariffs. The exemption provides particular relief to some of the magnificent seven, and others, who rely on Chinese manufacturing of electronics. Overall, roughly $390 billion of US imports were exempted, including about $100 billion from China.
The Week Ahead - 14 - 18 April 2025
These are the Key Macro Events for the upcoming week.
One week later - Reversal Day
Reciprocal tariff pause limits downside risks, but growth shock still significant
The Week Ahead - 7 - 11 April 2025
These are the Key Macro Events for the upcoming week.