Archive

April 30, 2025
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EA: GDP Stimulated Faster Than Supply

  • Activity growth in Q1 shouldn’t be dismissed as it helps signal the economy’s momentum and effective monetary conditions that trade shocks will fall on top of in the euro area.
  • GDP growth exceeded expectations again by increasing to 0.35% q-o-q. Productivity’s poor post-pandemic performance helps GDP drive the ongoing fall in unemployment.
  • Supply’s trend seems to have softened despite demand’s improving, raising excesses and the risk that ECB monetary policy was already stimulative before the trade shock.

By Philip Rush

April 29, 2025
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EA: Easing Stagflationary Noise

  • Hard economic data must match gloomy sentiment to justify ECB rate cuts reaching a stimulative setting. The little evidence available so far doesn’t show much of a shock.
  • Bank lending growth kept rising for companies and households in March as monetary conditions appear to be loosening, not tightening, due to the initial tariff shock.
  • Activity surveys only softened slightly in services, while inflation expectations are broadly high. Failure to see much more stagflation eases the likelihood that it occurs.

By Philip Rush

April 28, 2025
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UK Politics: Labour Day, Not Labour’s Day

  • With the balance of how many seats Labour loses to Reform UK relative to the LibDems and Greens being potentially decisive in internal party wrangling, the outcomes of the 1 May local elections and a concurrent by-election stand to have a significant impact on government policy.

By Alastair Newton

April 25, 2025
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HEW: Put Inside The Trump Collar

  • US policy kept driving volatility over Easter. Sensible responses to market weakness may be matched on the upside with MAGA shocks, creating a Trump Collar to pricing. Yet the global economy is unfazed by the attacks and uncertainty, contrary to the consensus.
  • Next week’s release calendar is heavier with data, including some that provide needed colour on current conditions. US payrolls, the ISMs, and Euro inflation for April are highlights, with Q1 EA and US GDP probably discounted by the market as old news.

By Philip Rush

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