The Weekly Briefing from Capital Economics

This week, Neil Shearing is joined by James Reilly and Jack Allen-Reynolds to unpack the latest bond market sell-off, the forces driving higher global yields, and why equity markets continue to defy expectations. They also examine mounting fiscal concerns in France, assess whether the eurozone faces a renewed debt crisis, and discuss how Europe is responding to growing competitive pressures from China.
https://www.capitaleconomics.com/publications/global-economics-update/what-bond-sell-means-monetary-policy
https://www.capitaleconomics.com/publications/capital-daily/increasingly-narrow-equity-rally-rings-alarm-bells

The global economy is facing another energy shock, yet growth has remained remarkably resilient. In this week's Capital Economics Weekly Briefing, Neil Shearing is joined by Jennifer McKeown and Mark Williams to discuss why households, governments and the AI investment boom have helped cushion the blow, and why markets may be overestimating how much further central banks will tighten policy.
The team also explores the implications of China Shock 2.0. With China's exports surging even as domestic demand remains weak, they examine how Beijing's industrial strategy is reshaping global trade, who stands to benefit, and which economies are most exposed to the costs. They also discuss why China's leaders are unlikely to change course anytime soon and what this could mean for global imbalances, inflation and financial markets over the coming decade.
https://www.capitaleconomics.com/publications/global-economic-outlook/weathering-energy-shock
https://www.capitaleconomics.com/key-issues/china-shock-20

What did President Xi Jinping’s summit with Donald Trump tell us about the future of US-China relations? Has the latest trade truce brought the two sides any closer to resolving their differences? And with China’s exports booming despite weak domestic demand, can the economy continue to hold up?
Chief Global Economist Jennifer McKeown and Head of China Economics Julian Evans-Pritchard join us on the latest episode of The Weekly Briefing to discuss the Xi-Trump summit, tariffs, rare earths, AI and Taiwan, as well as the outlook for China’s economy.
Also on the show, we discuss the latest edition of our China Economic Outlook, including why exports remain so strong, why domestic demand is still weak and what this means for China’s growth, inflation and property markets.
https://www.capitaleconomics.com/publications/china-economic-outlook/near-term-relief-headwinds-remain
https://www.capitaleconomics.com/key-issues/china-shock-20

Neil Shearing and Jennifer McKeown unpack a pivotal week for the world's major central banks. They discuss the Federal Reserve's latest rate hike and what it says about the independence of central banks in an era of political pressure. They then talk about why the market may be mispricing the future path of interest rates in the US, euro-zone, Japan and the UK. Finally, they discuss Capital Economics' new China Shock 2.0 research programme, exploring how China's export surge is reshaping the global economy and creating challenges and opportunities for Europe, Asia and beyond.
Find out more about our China Shock 2.0 work and upcoming events:
https://www.capitaleconomics.com/events#in-person
https://www.capitaleconomics.com/key-issues/china-shock-20

The stunning surge in Chinese exports bears comparison with what happened during the first China shock of the early 2000s. But this time is different: the scale is much larger, the goods being exported are much more advanced and the geopolitical environment is much more fraught.

In this special episode of The Weekly Briefing, Group – Chief Economist Neil Shearing introduces Capital Economics' new series on China Shock 2.0, explaining what this shock means for the global economy, why the costs this time are falling hardest on Europe and why an orderly adjustment to global imbalances looks out of reach. 

Find out more about our events happening in North America, Europe and Asia this autumn:
https://www.capitaleconomics.com/events#in-person