Our research

Rates Outlook 2027: Steeper roads ahead

We expect a steeper Bund curve in 2027, with lower front-end yields as ECB easing is repriced, while higher supply and term premium pressures keep ultra-long yields elevated. Spain and the Netherlands have a more supportive outlook than France, Italy and Belgium, reflecting stronger fundamentals and/or more favourable supply dynamics. We expect US curve steepening, primarily in 2s10s, as eventual Fed easing supports the front end while fiscal concerns, large refinancing needs and a elevated term premium limit longer-end yields declines. The Dutch pension transition should reinforce 10s30s steepening and 30Y swap-spread widening, as hedging demand shifts away from the ultra-long end. Overall, we expect yield declines to be concentrated at the front-end, alongside curve steepening in UST 2s10s, Bund 2s10s/10s30s and EUR IRS 10s30s.

US Watch - Data seal the hike, not the jumbo

Strong October payrolls and another firm core CPI print settle the case for a December hike. They do not make the case for the 50bps move Governor Waller has put on the table. Wages are not chasing prices, long-term expectations remain anchored, and the energy shock behind the headline is fading. Our base case remains a 25bps hike on 9 December.

Energy Outlook 2027: Rebalancing the system

Energy markets enter 2027 with depleted inventories, disrupted trade flows and persistent supply constraints. This outlook examines crude oil, European gas and refined products, assessing how recovering supply and new capacity could ease prices during the year. While we expect market normalisation, inventory replenishment, refinery repairs and shipping bottlenecks should limit the pace of adjustment. Geopolitical uncertainty and weather remain key risks to the outlook.

FX Outlook 2027: A weak euro in 2027

US - The energy shock fades, the AI boom doesn’t

Investment will keep driving growth in 2027, consumers keep up as falling inflation lifts real incomes. The energy shocks will fade without second round effects, the AI build-out keeps core inflation elevated. After one last hike in December, the Fed holds through most of 2027 before easing late in the year

Global Outlook - How resilient is resilience?

In this publication we present our economic outlook for the year ahead, while also adding our forecasts for 2028 for the first time. The global economy has expanded robustly despite many shocks over the past few years. We will explain why we think the economic expansion will continue, though we could once see more divergence between the US and the rest of the world, with Europe in particular falling behind. In addition, we explore a number of risks hanging over the global economy, which could potentially challenge the global economy’s remarkable record of resilience.

Global climate policy after the US withdrawal: Europe braces for a warmer world

After taking office in January 2025, the Trump administration withdrew from the Paris Agreement and began dismantling federal climate policies. The recently published UNEP Emissions Gap Report 2026 (see here) provides an annual assessment of the gap between current climate commitments and the emission reductions needed to meet the goals of the Paris Agreement. This year’s report concludes that an overshoot of 1.5°C is now unavoidable, shifting the focus towards limiting its magnitude and duration and ultimately bringing global warming back to 1.5°C by the end of the century. Against this backdrop, climate adaptation has become increasingly important. In this research note, we examine how GHG emissions have evolved in the US and other major economies since the US withdrawal. We then assess how climate policies and ambitions have changed across major countries and regions, as reflected in their NDCs. Finally, we examine the European Commission’s recently published EU Framework for Climate Resilience, which reflects the growing recognition that Europe needs to prepare for a warmer world even as efforts to curb emissions continue.

Top of Mind - AI and the neutral rate: Live and let rise

Where policy rates settle in the long run, and where long-term yields trade, depends on the real neutral rate of interest, r*. AI is now putting upward pressure on it from two sides. The build-out of data centres, chips and power is the largest investment boom in decades, and the productivity gains it promises could change how fast the economy grows. This note asks what both do to r*, in the US and the euro area.

FX Weekly - Currencies on the move

Brazil’s unexpected election result triggered a sharp fall in the real: it dropped 12% before recovering to 8% below Friday’s 23 October close. We see scope for the real to recover, supported by high real rates and less political instability. Investors favour the US dollar ahead and mid-term US elections. Speculative community has their highest net short positions in the euro since November 2016. RBNZ, Fed, ECB and BoJ kept rates unchanged; BoC hiked.

US – Strong growth, sticky inflation