Archive

June 27, 2025
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HEW: Incentives To Ignore Macro Data

  • Rates were repriced lower without new data to justify it. Trump incentivises doves with a possible early Fed Chair decision, and the two FOMC outliers revealed themselves.
  • PMIs extended their recovery in the June flash. Mexico and Thailand matched market calls, but the former signalled slower easing and US trade policy risks reduced further.
  • Next week lacks central bank decisions, but US payrolls and EA inflation data are critical to perceptions of the outlook, including our contrarian calls for no more cuts.

By Philip Rush

June 20, 2025
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HEW: Playing For Time

  • US diplomacy with Iran has been given two weeks, bringing it close to the reciprocal tariff deferral date. Both may roll later, while central bankers wait to see the impact.
  • Unsurprising UK and EA inflation data offered little direction, nor did the BoE or Fed. Brazil and Norway delivered opposite surprises outside a flood of cautious statements.
  • Next week is much quieter for data and decisions (TH and MX). The flash PMIs are the main global highlight, although some HICP and PCE data are notable on Friday.

By Philip Rush

June 13, 2025
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HEW: Geopolitics Blow Hot And Warm

  • Israel’s attack on Iran squeezes supply in an unwelcome shock that is harder for central bankers to look through post-pandemic. Warming US-China relations had less impact.
  • Avoidance measures have helped mitigate the tariff shock so far, with US CPI holding steady. The importance of recent disappointing UK demand data is easy to overstate.
  • The BoE is set to hold rates, probably with two dovish dissents and no commitment to August. UK inflation should slow with airfares normalising and a vehicle tax correction.

By Philip Rush

June 06, 2025
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HEW: Poorly Positioned Doves

  • The ECB was even more hesitant to signal cuts than we expected, with the level after the unsurprising cut now deemed well-positioned. Cuts will require downside news.
  • Disinflationary surprises across the Euro area in the May flash releases are already embedded in that assessment. Doves are poorly positioned for this reaction function.
  • US inflation data may be the most crucial global release next week, although the signal may not be clear. Statistical issues affect the UK labour market and GDP data.

By Philip Rush

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