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Inflation Persistence Constrains Norges Bank

• The Norges Bank held rates at 4% as expected. Core inflation at 3% constrains further cuts despite emerging economic slack in the coming year.
• Governor Bache stressed the bank is "not in a hurry" to cut rates, projecting one reduction annually through 2028. Cuts depend on disinflation progressing as forecast.
• December's new forecasts will be critical—faster disinflation or sharper labour market weakness could accelerate cuts, while persistent inflation could keep rates higher for longer.

Malaysia Defies Regional Easing

• Bank Negara maintained the OPR at 2.75% in November 2025, aligned with forecasts, reflecting confidence in steady 5.2% Q3 growth and contained inflation.​
• The decision contrasts with regional easing trends; the central bank views the current stance as appropriate amid resilient domestic demand and easing tariff uncertainties.​
• Forward guidance indicates rates are likely to be stable through mid-2026, contingent on global trade developments, inflation trends, and US rate shifts.

Mexico: Cautious Easing in Uncertain Times

• Banxico cut rates by 25bp to 7.25%, in line with the consensus. Guidance turned more cautious, with policymakers less committed to further easing soon.​
• The 4-1 vote (one dissent for a hold) underscores internal concern about persistent core inflation, which could constrain scope for additional rate cuts.​
• With GDP contracting and core prices sticky, future rate moves hinge on inflation's path and external risks. The pace of easing will likely slow from here.

Rebound To Resilience

• The diverging services PMI and ISM resolved bullishly in October, with activity broadly back to 2024 averages. The ISM headline still looks lower because it is a composite.
• Price balances remain extremely elevated while employment’s weakness has become less acute, skewing the trade-off more hawkishly for any policymaker’s preferences.
• The broader global deterioration in PMIs and unemployment last month also recovered in the latest round of releases. These data are not screaming for any more easing.

By Philip Rush