Archive

August 15, 2025
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HEW: Wrong Policy Turnings

  • As soon as a data point calms nerves around a theme, a hawkish challenge seems to appear. This week, that was US CPI into PPI and UK unemployment into GDP.
  • A bias to ease, triggered by a one-touch round of bad news, has consequences when not sustained. The BoE’s early start to its easing cycle has proved to be a policy mistake.
  • Next week is a prime opportunity for Chair Powell to calm dovish excitement about Fed easing. UK inflation seems set to rise by another tenth, while the EA rate sticks at 2%.

By Philip Rush

August 08, 2025
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HEW: Hawks Overruled

  • The BoE Governor overruled his Chief Economist and Deputy Governor to deliver a rate cut, while Donald Trump appointed a dovish patsy in the hope of achieving the same.
  • Whether poor payrolls presage a flow of data that breaks our resilience narrative is more important to the policy outlook. Europe stayed strong, with a retail rebound.
  • UK unemployment (4.3%), GDP (0.1% q-o-q) and US inflation are the data highlights next week, with the RBA (cut) and the Norges Bank (unchanged) holding the policy ropes.

By Philip Rush

August 01, 2025
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HEW: Atlantic Jobs Divide

  • Depressing revisions to US payroll data clash with the resilience seen in other data, and compare poorly with the bullish revisions to the Euro area’s labour market.
  • Jobs data challenge the Fed’s patient posture, while the Euro area’s sticky inflation and tighter labour markets should encourage it to keep rolling rate cuts later.
  • Thursday’s BoE decision sets unemployment’s rise against inflation persistence, leaving the outcome uncertain, yet it is likely to yield another split vote for a rate cut.

By Philip Rush

July 25, 2025
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HEW: Trade Deals & Fiscal Slippage

  • Market narratives were driven by US trade pacts, critically with Japan, the ECB watching data from a good place, and further evidence of UK fiscal problems.
  • Tariff uncertainty eased slightly, but it is still fierce ahead of the 1 August deadline. PMIs remained resilient, and UK retail sales rebounded into growth again for Q2.
  • Next week brings Fed, BoC and BoJ meetings (broadly on hold), US and euro-area GDP growth for Q2, US payrolls, euro-area unemployment and slower flash HICP data.

By Philip Rush

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