Archive

November 07, 2025
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HEW: Caution Echoes Outside the BoE

  • The BoE resisted cavalier calls for a rate cut this week, but it is much less cautious than we expected. A December rate cut is now likely, absent significant upside surprises.
  • All other central bank announcements this week fit the trend, with cautious holds in Australia, Sweden, Norway, Malaysia and Brazil, and a more careful cut in Mexico.
  • Next week’s UK labour market (and GDP) data are one of the few things that could clear the evidential hurdle to block a cut, although we doubt good news will extend that far.

By Philip Rush

October 31, 2025
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HEW: Cautious Committees

  • Central bankers broadly delivered on expectations this week, while cautioning that changes will likely be less than markets assume. The BOJ and ECB were also cautious.
  • Flash EA inflation slowed, as expected, but services and core stoked hawkish pressure, while money and credit data in the EA and UK show accommodation of inflation.
  • Next week’s BoE decision is no longer priced as a forgone conclusion, but the case to cut is weak. Like its peers, the BoE should cautiously damp dovish expectations.

By Philip Rush

October 24, 2025
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HEW: Heavy Hitters Pulling Punches

  • Sentiment stabilised this week as credit issues are realised to be more of a long-term problem than an imminent issue. Indonesia and Korea hawkishly held their policy rates.
  • Inflation undershot final expectations in the UK and US, yet constitutes less excess rather than outright weakness, and merely aligns with slightly earlier forecasts.
  • Next week’s release calendar has some heavy hitters, but pulling their punches. The Fed cut and ECB hold are widely expected, as is a marginal slowing in EA inflation.

By Philip Rush

October 17, 2025
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HEW: Cockroaches Startle Pricing

  • Losses on bad and fraudulent US loans raise the risk that more cockroaches will emerge, nourished by monetary policy stimulating asset prices outside of recessionary regimes.
  • Market rates fell on this, while macro data didn’t offer direction as UK Q3 GDP kept tracking 0.2%, EA inflation was confirmed, and UK labour market data were mixed.
  • Next week’s UK inflation data should reveal a rise, with the CPI reaching 4%. Delayed US CPI data will provide a rare signal more relevant to the Fed’s likely decision to cut.

By Philip Rush

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