Archive

May 07, 2024
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UK Politics: The Third Way Renewed?

  • The outcome of the so-called ‘battle for Labour’s soul’ will ultimately be determined principally by Sir Keir Starmer’s understated but undoubted ambition coupled with the Third Way principle that ‘what matters is what works’.

By Alastair Newton

May 02, 2024
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Hedge in May and Go Away

  • A sharp rise in market rates drove down equity prices in April. The correlated move was consistent with our suggestion before Easter to hedge the downside with equity options.
  • We now believe the front end is broadly flat enough, so we have turned neutral on rates relative to the market despite being more hawkish than the consensus on the BoE.
  • The potential for market expectations to overshoot again, extending the bearish trends, means hedging with options may still appeal over selling or hoping for recovery.

By Philip Rush

April 30, 2024
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EA Core Inflation Softens By Slightly Less

  • EA inflation unsurprisingly remained at 2.4% y-o-y in April, with a 5bps slowing taking it within 1bps of our forecast. Energy and industrial goods continue to weigh temporarily.
  • Services inflation ended a five-month streak at 4%, slowing to 3.7%. That was a tenth higher than we expected again, with the core rate 3bps more resilient at 2.67%.
  • The ECB will be reassured by services inflation slowing, easing a June cut, but ongoing upside surprises urge caution, with September’s cut conditional on progress at the Fed.

By Philip Rush

April 29, 2024
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UK Politics: Early Election?

  • Whether or not the overall outcome of this week’s local elections and by-election is as bad for the Conservatives as expected, Rishi Sunak may be increasingly inclined to give serious thought to a snap general election as challenges mount.

By Alastair Newton

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