March 27, 2026 09:17 AM GMT Asia Economics | Asia Pacific The Viewpoint: How policy responses to the energy shock could evolve Fiscal measures will likely cushion the initial 30-50% increase in international oil prices but the pass-through to domestic fuel prices will rise if oil prices stay higher for longer. However, this still does not mean that central banks in Asia will hike as much as the market is pricing in. Key Takeaways In this report, we discuss the policy response to energy shock and how it will ...

Hello and welcome to a special Bloomberg UK programming on TV, radio and online. The Chancellor of the Exchequer, Rachel Reeves, is due to give a statement to the House of Commons shortly announcing the latest economic forecasts from the Office for Budget Responsibility. I'm at Edwards alongside Tom Mackenzie this afternoon live in London at our European headquarters.Let's begin with a check on U.K. assets as we just sort of Rachel Reeves walking into the House of Commons. The pound is under pressure. Gilts ...

Summary of Key Points from the Conference Call Industry Overview - The focus is on the Chinese economy and its growth targets for 2026, particularly in the context of the National People's Congress (NPC) and the 15th Five-Year Plan (FYP) [1][3][8]. Core Insights and Arguments - **GDP Growth Target**: The national GDP growth target for 2026 is expected to remain at approximately 5%, despite many provinces lowering their individual targets. This is aimed at maintaining market confidence during the first year of the 15th FYP [3][8]. - **Policy Stance**: The policy approach is characterized as "cushioning over lifting," indicating that significant stimulus measures are not anticipated. The fiscal envelope is expected to remain flat compared to 2025, with an augmented fiscal deficit of 11.6% of GDP and a budget deficit of 4% of GDP [3][5][8]. - **Fiscal Policy**: The initial fiscal package is projected to be largely unchanged from 2025, with a focus on technology localization and infrastructure investment. A modest package of RMB 500-600 billion is anticipated to support consumption and social welfare, with potential mid-year top-ups if growth momentum weakens [5][12][13]. - **Housing Policy**: A pilot program for mortgage subsidies in select cities is expected post-NPC, reflecting a cautious approach to stimulating the housing market [5][12]. - **Sector-Specific Focus**: The 15th FYP is likely to prioritize sectors such as AI, semiconductors, green energy, and biotechnology, shifting from broad-scale expansion to enhancing R&D ecosystems and promoting healthy competition [10][13]. Additional Important Content - **Market Confidence**: Beijing's strategy emphasizes the importance of anchoring market confidence, especially in light of the economic challenges posed by the housing down-cycle and US-China tensions [8][10]. - **Gradual Measures**: The anticipated measures are described as gradual and focused on providing a floor to domestic demand rather than a strong lift, indicating a slow reflation path for the economy [11][12]. - **Long-term Outlook**: The report maintains a forecast of 4.8% real GDP growth and 4.1-4.2% nominal growth for 2026, with infrastructure and exports expected to offset weaknesses in housing and consumption [11][12]. This summary encapsulates the key points from the conference call, highlighting the strategic direction of the Chinese economy and the anticipated fiscal and policy measures for 2026.

Core Viewpoint - The International Monetary Fund (IMF) recommends that Japan should continue to raise interest rates and avoid further loosening of fiscal policy, cautioning that reducing the consumption tax could weaken the country's ability to respond to future economic shocks [1][5]. Group 1: Interest Rate Policy - The IMF emphasizes the importance of the Bank of Japan's (BOJ) independence and credibility in maintaining anchored inflation expectations, advising against government interference in monetary policy [2][3]. - The BOJ is advised to gradually increase the policy rate towards a neutral stance by 2027, as the current monetary accommodation is being appropriately withdrawn [3]. Group 2: Fiscal Policy Recommendations - The IMF warns against reducing the consumption tax, stating it would erode fiscal space and increase fiscal risks, while suggesting that limiting tax cuts to essential goods and ensuring they are temporary could help manage fiscal costs [5]. - A call for fiscal restraint is made to stabilize bond markets, with the IMF advocating for a credible medium-term fiscal framework that includes a clearly defined fiscal anchor [5]. - Japan's high and persistent debt levels, along with a deteriorating fiscal balance, expose the economy to various shocks, with projections indicating that interest rate payments will double from 2025 to 2031 as debt is refinanced at higher yields [5]. Group 3: Economic Context - Japan's total spending is significantly funded by debt, with approximately half of this debt held by the BOJ due to extensive money printing aimed at reflating the economy [6].

Currency Market Overview - The yen has gained nearly 3% for the week, marking its largest advance since November 2024, currently steady at 152.86 per dollar [1][10] - The yen is poised for a 2.3% weekly jump against the euro and approximately 2.8% against the British pound, indicating strong performance [10] Political Impact - The election of Japanese Prime Minister Sanae Takaichi is seen as a potential end to political instability, leading to unwinding of short-yen positions [1][10] - Takaichi's administration is expected to be a responsible steward of fiscal policy, which has boosted confidence in Japanese government bonds (JGBs) and reduced yen-volatility risk [4][10] Broader Market Context - Other currencies are mostly rangebound ahead of U.S. inflation data, with the euro at $1.1869 and sterling at $1.3618 [5][10] - The U.S. dollar is set to fall close to 0.8% for the week, influenced by strength in other currencies and doubts about the U.S. economy's robustness [6][10] Employment Data Insights - Recent U.S. job growth data showed unexpected acceleration, but the overall breadth of job creation remains narrow, with significant contributions from healthcare, social assistance, and construction [8][10] - Traders are pricing in approximately two Federal Reserve rate cuts this year, with the first anticipated in June [8][10]

Naomi, we're seeing a little bit of downside for the Japanese yen, but it doesn't seem to be at least catastrophic for now, when it comes to the pace of potential losses that we could have seen with the supposed Takaichi trade. What are your expectations now that you've seen the outcome of the elections. Well, what's interesting is that even though Takaichi won quite a lot of popular support, markets haven't voted yet.And so I think it's sensible to to give Takaichi the benefit of the doubt because after al ...

Close inspection of Nigel Farage’s proposal to stop paying interest on reserves held at the Bank of England shows it to be fiscal fool’s gold https://t.co/vnxOXvIzds ...

Pro-criminal, anathema. But thanks to our local authorities in the state, just three months into the job, Prime Minister Sonny Takeuchi dissolved Japan's lower house, calling a fresh vote for February 8th to invoke Kazan of coming from a string of election setbacks for the ruling Liberal Democratic Party. Takeuchi is aiming to capitalize on high public support and increase her majority in the more powerful lower House.Some recent polls show an approval rating of more than 60%. I think Takeuchi is really in ...

Summary of Key Points from the Conference Call Industry Overview - The report discusses macroeconomic forecasts and trends affecting global markets, particularly focusing on GDP growth and inflation rates across various regions including the US, Euro area, and China [4][5]. Core Insights and Arguments - **Global GDP Growth**: Expected to be 2.9% year-over-year in 2026, driven by fading US tariffs and rising real income growth [4][5]. - **US Economic Outlook**: Anticipated real GDP growth of 2.5% on a Q4/Q4 basis in 2026, supported by tax cuts and easing financial conditions, despite trade policy uncertainties [4][5]. - **Inflation Trends**: Core PCE inflation in the US is projected to decline to 2.1% year-over-year by the end of 2026, as tariff impacts diminish and wage/shelter inflation trends improve [4][5]. - **Federal Reserve Policy**: The Fed is expected to implement two 25 basis point cuts in 2026, leading to a terminal rate range of 3-3.25% [4][5]. - **Euro Area Growth**: Projected real GDP growth of 1.2% year-over-year in 2026, with inflation expected to decline to 1.8% due to lower energy prices and a stronger Euro [4][5]. - **China's Economic Performance**: Forecasted real GDP growth of 4.8% year-over-year in 2026, bolstered by resilient export growth and government policy easing, despite sluggish domestic demand [4][5]. Additional Important Insights - **Geopolitical Risks**: Ongoing geopolitical tensions, including US-China relations and developments in Venezuela and the Middle East, pose significant risks to economic stability [5]. - **Commodity Price Forecasts**: LME aluminum price forecasts have been raised to $3150/$2965/$2435 per metric ton for 3/6/12 months, reflecting a balanced global market that supports high prices without rapid production increases [1]. - **Unemployment Rates**: The unemployment rate in the US is expected to stabilize at 4.5% by the end of 2026 [4][5]. This summary encapsulates the key points from the conference call, highlighting the macroeconomic outlook and potential investment implications across various regions and sectors.

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - The global economy is expected to expand at a reasonable pace in 2026, supported by easing monetary policy, fiscal stimulus, and the ongoing AI boom, although the backdrop remains fragile and volatile due to heightened uncertainty and geopolitical risks [14][20][35]. Section Summaries Section 1: Prospects for the Global Economy in 2026 - The global economy is projected to grow at just over 3% in 2026, with the World Bank forecasting 3.1% and the IMF 3.3% [35][41]. - The US economy is expected to be the strongest performer among major advanced economies, with growth supported by fiscal stimulus and the AI boom, while growth in the UK and euro area is likely to remain sluggish [15][55]. - China is expected to moderate its growth to 4.4%, while India is projected to remain the fastest-growing major economy at 6.5% [19][69]. Section 2: Interview with Former IMF Chief Economist Ken Rogoff - Ken Rogoff describes the global economy as solid but cautions about significant uncertainty not reflected in financial markets, predicting a potential stock market fall in the next three years [20][81]. - He highlights the risks associated with President Trump's policies, particularly regarding trade and immigration, which may have long-term negative consequences for the US economy [84]. Section 3: Key Events in 2026 - Key political events include the US mid-term elections in November, which could impact President Trump's policy maneuverability [21][99]. - Developments in Europe, particularly regarding right-wing populist parties, will also be closely monitored, alongside significant elections in Japan and Brazil [102][107]. Section 4: Three Key Trends to Watch in 2026 - The report identifies three key trends: developments in AI, advanced economy bond markets, and global trade [22]. - The impact of AI on productivity and market sentiment will be crucial, as will the potential for rising government bond yields to negatively affect financial markets [22]. Section 5: Perspectives from Business Leaders - Business leaders express concerns about economic uncertainty and the need for resilience and adaptability in their respective regions [23]. - Wu Chen emphasizes a two-speed global economy, while Mike Fowler highlights the lack of a pro-business agenda in the UK [23]. Ebrima Sawaneh focuses on the importance of decarbonization and digital reliability for African economies [23].