June 01, 2023
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EA: HICP Inflation Resumes Trend Lower

  • Flash EA inflation fell by 86bp to 6.11% in May-23, undershooting forecasts by 0.2pp. The outcome still resumes the downward trend since the Oct-22 peak.
  • Germany was the primary geographic source of the downside news for us, but energy prices were the weakest area. Transport, housing, and food are driving inflation down.
  • We expect another fall for similar reasons in June, albeit slightly smaller. Excessive underlying inflationary pressures remain inconsistent with reaching 2% sustainably.

By Philip Rush

May 31, 2023
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Jefferson - Financial Stability and the U.S. Economy

Financial Stability and the U.S. Economy

May 31, 2023
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UK-US Peak Pricing

  • A substantial repricing of the monetary policy outlook embraces our “tighter for longer” theme. However, pricing may have overextended the UK relative to the US.
  • The US cycle is proving even more resilient than the UK, albeit without the worryingly excessive inflation expectations in wage settlements.
  • With 25bp BoE hikes almost entirely priced at the following four meetings, while the Fed grinds to one, further frontend repricing seems likely to shrink the BoE-Fed spread.

By Philip Rush