Archive

September 26, 2025
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HEW: Resilience Reminders Roil Doves

  • Bullish GDP revisions and jobless claims provided further reminders that the economy is much more resilient than market pricing has dovishly assumed, causing a hawkish shift.
  • Nonetheless, the Riksbank surprised with a 25bp rate cut, but projected that as the terminal rate before hikes start reversing the stimulative setting in 2026.
  • Next week’s US payrolls data dominates the calendar, given the potential to break market conviction in an October Fed cut. EA inflation should rise back above the target.

By Philip Rush

September 19, 2025
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HEW: Cautious Cuts Through The West

  • Economic data releases revealed more resilience in labour markets than feared, while inflation remained high. Yet Western central banks broadly cut rates, albeit cautiously.
  • The BoE’s caution left only two dovish dissents to its on-hold decision, while it cut QT by £30bn to £70bn to reduce the likelihood of gilt market indigestion.
  • Next week’s SNB and Riksbank decisions should join the BoE in holding steady, although they have already cut much further. Flash PMIs are the data focus in a thin calendar.

By Philip Rush

September 12, 2025
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HEW: Crystalising Policy Divergence

  • Spreads between ECB and Fed expectations widened again this week as the ECB held rates with a neutral bias while disappointing US labour market data drive dovish hopes.
  • Underlying US services inflation was soft, and initial jobless claims spiked, albeit over Labor Day. We think US pricing has gone too far, and political pressure won’t dominate.
  • Guidance with the Fed’s upcoming cut could start to correct that. The BoE will hold rates, after more hawkish macro news next week, and should trim its QT plan this year.

By Philip Rush

September 05, 2025
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HEW: Pauses On And Off

  • Another disappointing payroll release provides the fundamental cover needed for the Fed to end its pause with a rate cut on 17 September without being too political.
  • The BoE is starting its own pause, and if it goes a quarter without cutting, historically, it’s not resumed the cycle. Its DMP survey confirmed inflation’s persistent problem.
  • Another upside inflation surprise seems set to keep the ECB on hold amid record low unemployment. We also expect it to preserve its view that policy is in a good place.

By Philip Rush

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