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Global manufacturing - Riding the tariff rollercoaster
Global manufacturing PMI rose back to expansion territory in June … The global manufacturing PMI rose back to expansion territory in June (50.3), after having dipped below the neutral 50 mark separating expansion from contraction in April/May. The pattern was broad-based amongst developed economies (DMs) and emerging economies (EMs), with the average for DMs down in March and up again since May and the average for EMs down in April/May and up again in June.
The Week Ahead - 7 - 11 July 2025
These are the Key Macro Events for the upcoming week.
Global economic forecasts as of 2 July 2025
Group Economics writes regularly about developments in the macro economy. Here are our latest forecasts on interest rate and currency developments, energy prices and the economic trend in developed and emerging markets.
Global Monthly - Six themes to watch over the summer
Despite the rollercoaster ride in between, the landing zone for tariffs is looking remarkably close to our expectations last November. Trade deals are likely to be announced over the coming weeks, and even if they aren’t, we will probably see deadlines pushed back. Growth is still expected to slow near-term, but downside risks have been reduced, while a re-escalation is likely to prove short-lived. Further out, the US economy is expected to weaken, while eurozone growth is expected to pickup, driven by higher German fiscal spending. We preview these and other themes to watch over the summer. Spotlight: In this Sustainability special, we lay out the macro-economic impact of Net Zero and Delayed Transition scenarios.
Key views Global Monthly June/July 2025
Global growth expected to slow in the near term, as the US tariff shock drives an unwind of the frontloading of exports that occurred in Q1. While the tariff hit to growth remains significant, and the global economy (especially the US) will continue to be weighed by high policy uncertainty, downside risks have eased. 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 late 2025 and into 2026. 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 impact on real incomes. Inflation in the US is expected to reaccelerate, but to fall below target in the eurozone. This is driving a divergence in Fed & ECB policy, with Fed expected to stay on hold until 2026, and the ECB to cut rates somewhat further.
Japan - The Land of the Rising Yields
We expect drags from US tariffs to keep a lid on Japanese growth. Trade talks with the US are taking quite some time. The Bank of Japan (BoJ) recently lowered its inflation forecasts, but upside risks remain. We expect the BoJ to stay on a cautious, gradual hiking path. In its June meeting, the BoJ announced to slow its pace of tapering, as expected. High public debt and rising rates pose challenges, but there are risk-mitigating factors. Meanwhile, the Japanese government bond curve has steepened due to a higher term premium. We do not have indications for structural US debt outflows by Japanese investors, yet. We expect the yen to appreciate versus the US dollar in 2025-2026.
The Week Ahead - 30 June - 4 July 2025
These are the Key Macro Events for the upcoming week.
The Week Ahead - 23 - 27 June 2025
These are the Key Macro Events for the upcoming week.
The Week Ahead - 16 - 20 June 2025
These are the Key Macro Events for the upcoming week.
The Week Ahead - 9 - 13 June 2025
These are the Key Macro Events for the upcoming week.