Archive

June 02, 2025
2025-06-02 HEM_head.png

HEM: Better Never Than Late

  • Companies are smoothing out volatile trade policies
  • Activity remains strong and labour markets are tight
  • Underlying price and wage inflation is still too high
  • Markets expect cuts to resume later, contrary to history
  • The risk of rate hikes in 2026 is widely underappreciated

May 29, 2025
2025-05-29 GDP_head.png

Underlying GDP Trends Unbroken

  • Imports frontloaded before tariff rises seemingly disappeared in broadly unrevised US GDP data. Underperformance is exaggerated as an unwind, or revisions, are likely in Q2.
  • Final domestic private sales maintained their rudely bullish US trend while drifting back towards stagnation in the EA and are distorted by residual seasonality in the UK.
  • Superior US productivity trends preserve its structural attractiveness. Unemployment’s stability also suggests monetary conditions are near neutral, with easing unnecessary.

By Philip Rush


May 27, 2025
2025-05-27 AN_head.png

US vs EU: Crying ‘Wolf’?

  • Ursula von der Leyen’s 25 May call with Donald Trump can be seen as a ‘win’ for the US President following his threat to impose 50% tariffs on the EU from 1 June. Alternatively, one could see his reversion as the latest manifestation of the TACO principle.

By Alastair Newton


May 22, 2025
2025-05-22 PMI_head.png

PMI Goods Vibes

  • Broad improvements in the flash manufacturing PMIs demonstrate ongoing resilience relative to consumers’ bad vibes. Goods trade seemingly shrugged off the tariff shock.
  • The UK was alone in weakening, but it is more susceptible to bad vibes, showing more noise than signal. April’s spurious lows were revised away and may repeat or rebound.
  • Transmission to unemployment also isn’t happening, leaving little case for easing unless recessionary pressures build, and the PMIs still hawkishly suggest that isn’t the case.

By Philip Rush