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Weekly Macro & Markets View

What were the key global economic data releases, what is Zurich’s view and what does this mean for financial assets?

Weekly Macro and Markets View, Week 44

Highlights and View

  • The ruling coalition loses their majority in lower House elections due to dissatisfaction with the LDP party financing scandal and perceived higher inflation
    We believe a LDP/Komeito minority led government with cooperation from smaller parties on a case-by-case basis is the most likely scenario going forward.
  • China’s PBoC cuts both the 1yr and 5yr loan deposit rate (LPR) by 25bps
    Though the move was bigger than consensus had expected, we believe there is room to cut the LPR even further in Q1 next year to support the ailing economy and particularly the property market. Measures to boost consumption will also be required.
  • Incoming leading data continues to suggest a weak H2 for Eurozone economic growth, although there are signs of stabilisation
    Differences across member states persist, with Spain leading while Germany lags. Overall growth in 2025 will likely improve on 2024 from welcome monetary policy easing and growing real wages.

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