Despite imminent risks of further escalation in trade tensions, the big shift in German policymaking is to us an equally important macro story from the past quarter.
If there was ever a time when we shouldn't rely too heavily on forecasts, it is now. If you were to simply look at Figure 1 below and walk away without further investigation, you could easily conclude that all is right with the global economy. You would be wrong. Admittedly, steady growth near trend is not a bad outcome. But what that chart doesn’t tell you is that there is considerable turmoil brewing that has the potential to disrupt this appearance of calm in the months ahead.
So why not reflect those risks more visibly in the numbers? There are three reasons. First, because three months since our December update, we still grapple with considerable uncertainty around the “what”, the “when”, the “how”, and the “how long” of incoming US policy changes. Secondly, because even as some risks grow (i.e., trade), progress elsewhere (deregulation in US, stimulus in China), offer some partial offsets. And thirdly, the German debt break deal is a genuinely positive development whose beneficial impact will be felt over time. This is why, even as we trimmed US, Canadian, and UK growth, the 2025 eurozone forecast is unchanged. We see meaningful further improvement in 2026.
Despite imminent risks of further escalation in trade tensions (see More Storms Brewing: Are Tariffs on Europe Next?), the big shift in German policymaking is to us the equally important macro story of the past quarter. It speaks to a narrowing of the US growth outperformance, which had been previously anticipated in 2024 but failed to materialize. Now, there is a powerful fundamental catalyst behind that expectation in 2025. It is too soon to give up on the US exceptionalism story (separate policy goals from policy tactics), but it may ben time to believe in Europe once again.
Central bank expectations are unchanged. We expect another hike from the BoJ, and 75 bp worth of cuts from Fed, 100 bp from ECB, and 125 bp from the BoE for the year as a whole.
There's more to the Weekly Economic Perspectives in PDF. Take a look at our Week in Review table – a short and sweet summary of the major data releases and the key developments to look out for next week.
PLEASE READ THE FOLLOWING TERMS AND CONDITIONS CAREFULLY. BY ACCESSING THIS WEBSITE AND ANY PAGES THEREOF (THE "SITE"), YOU AGREE TO BE BOUND BY THE TERMS AND CONDITIONS LISTED BELOW. IF YOU DO NOT AGREE TO THE TERMS AND CONDITIONS BELOW, DO NOT ACCESS THIS SITE, OR ANY PAGES THEREOF.
Site Owner and Operator
The Site is owned and operated by State Street Global Advisors Asia Limited (道富環球投資管理亞洲有限公司), State Street Global Advisors Asia is part of State Street Global Advisors the investment management arm of State Street Corporation.
No Offer/Local Restrictions
Nothing contained in or on the Site should be construed as a solicitation of an offer to buy or offer, or recommendation, to acquire or dispose of any security, commodity, investment or to engage in any other transaction. State Street Global Advisors offers a number of products and services designed specifically for various categories of investors. Not all products will be available to or suitable for all investors. The information provided on the Site is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. All persons and entities accessing the Site do so on their own initiative and are responsible for compliance with applicable local laws and regulations. The Site is not directed to any person in any jurisdiction where the publication or availability of the Site is prohibited, by reason of that person's nationality, residence or otherwise. Persons under these restrictions must not access the Site.
Information for Non-Hong Kong Persons
This Site, and the products and services described on this Site, are intended to be made available only to residents in the Hong Kong Special Administrative Region, and the information on this Site is only for such persons. Nothing on this Site shall be considered a solicitation to buy or an offer to sell a security to any person in any jurisdiction where such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction.
No Reliance
Information contained in the Site is checked and updated by State Street Global Advisors Asia with due diligence on a regular basis. However, data on the Site may become outdated. In addition, due to the risk that the Internet may be subject to interruption, transmission blackout, delayed transmission due to internet traffic, or incorrect data transmission due to public nature of the internet, the information contained in the Site may be incomplete, altered or tampered with, and may not present complete and accurate information. Therefore, neither State Street Global Advisors Asia nor any of its affiliates assume any liability or guarantee for the timeliness, accuracy and completeness of the information provided. State Street Global Advisors Asia uses reasonable efforts to obtain information from sources which it believes to be reliable; however, State Street Global Advisors Asia and its affiliates make no representation that the information or opinions contained on the Site is accurate, reliable or complete. In particular, any information sourced from third parties is not provided or endorsed by State Street Global Advisors Asia and State Street Global Advisors Asia has not checked the accuracy or completeness of, and accepts no liability for, such third party information.
The information on the Site is provided for informational purposes only and is subject to change without notice. The investments and strategies discussed in the contents may not be suitable for all investors and are not obligations of, or guaranteed by, State Street Global Advisors Asia or its affiliates. Nothing contained on the Site constitutes investment, legal, tax or other advice nor is to be relied on in making an investment or other decision. You should obtain relevant and specific professional advice before making any investment decision. In particular, the information on this Site does not take into account your investment objectives, financial situation or particular needs. Before making an investment decision you should consider with the assistance of your professional securities adviser whether the information on this Site is appropriate in light of your particular investment needs, objectives and financial circumstances.
No Warranty
THE INFORMATION ON THE SITE IS PROVIDED "AS IS". NEITHER STATE STREET GLOBAL ADVISORS ASIA NOR ITS AFFILIATES WARRANTS THE ACCURACY OF THE MATERIALS PROVIDED HEREIN, EITHER EXPRESSLY OR IMPLIEDLY, FOR ANY PARTICULAR PURPOSE AND EACH EXPRESSLY DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
Important Risk Disclosure
Historical performance is not necessarily indicative of future performance of an investment. The value of investments may fall as well as rise and investors may not get back the amount invested. Investing involves risk including the risk of loss of principal.
Applications to create or redeem interests in any exchange traded fund referred to on this Site ("Units/Shares") may only be effected through participating dealers, and are generally only issued or redeemed in large blocks. Investors may request participating dealers to apply on their behalf for the creation and/or redemption of Units/Shares. Once listed, investors can also acquire or dispose of Units/Shares on the exchange on which such Units/Shares are listed like other publicly traded shares. However, listing does not guarantee a liquid market for Units/Shares. Units/Shares are traded on the relevant exchange at market price, which may be different from the net asset value per Unit/Share, and may be delisted.
Please read carefully the risk disclosures in the relevant prospectus or other offering document before making any investment decision.
Conflicts of Interest
State Street Global Advisors Asia and its affiliates may have an interest in the securities, derivatives and other financial products referred to in, or accessible through, this Site and may trade for their own account as principal or earn fees, commission or other income in respect of transactions related thereto.
Limitations of Liability
Except to the extent to which any law prohibits such exclusion, State Street Global Advisors Asia excludes all liability for loss or damage of any kind (including direct, indirect and consequential loss and damage of business revenue, loss of profits, loss or corruption of data, failure to realise expected profits or savings or other commercial or economic loss of any kind), however caused, in contract, tort, under any statute or otherwise (including negligence) arising out of or in any way related to this Site. In no event, including negligence, will State Street Global Advisors Asia or its affiliates be liable for any loss or damage of any kind, including any direct, special indirect or consequential damages arising out of or in connection with the access of, use of, performance of, browsing in or linking to other sites from the Site.
Indemnification
As a condition of your use of the Site, you agree to indemnify and hold State Street Global Advisors Asia and its affiliates harmless from and against any and all claims, losses, liability, costs and expenses (including but not limited to attorneys' fees) arising from your use of the Site, or from your violation of these Terms.
Linked Websites
Should the viewer leave the Site via a link contained in the Site, the viewer does so at its own risk. The content to which you link will not have been developed, checked for accuracy, or otherwise reviewed by State Street Global Advisors Asia, and State Street Global Advisors Asia will not accept any responsibility whatsoever for the content of such sites or any losses related thereto.
Privacy
Please see the "Privacy" section for information on how State Street Global Advisors handles personal data, what information is collected and how it is used and your rights in respect of any of your personal data collected by State Street Global Advisors on this Site.
Changes and Modifications
State Street Global Advisors Asia reserves the right to change, modify, add, or delete, any content and these Legal Terms & Conditions without notice. Users are advised to periodically review the contents of this website to be familiar with any modifications.
Governing Version
In the event of any inconsistency between the Chinese translation of these terms and conditions and the English version of these terms and conditions, the English version of these terms and conditions shall prevail.
Governing Law and Jurisdiction
By accessing this Site you agree that the laws of the Hong Kong Special Administrative Region governs such access and the use of this Site and you agree to submit to the non-exclusive jurisdiction of the courts of the Hong Kong Special Administrative Region. You waive any right to object to an action being brought in those courts including, without limitation, by claiming that the action has been brought in an inconvenient forum or that those courts do not have jurisdiction.