Archive

July 18, 2025
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HEW: Inflation Persists, But Cuts Loom

  • Persistent upside inflation surprises and sticky wage growth are lifting hawkish market narratives, defying central bank and consensus hopes for a quick return to target.
  • UK inflation jumped well above forecast in June, strengthening the hawkish case, while US core inflation shows tariffs adding to excessive underlying price pressures.
  • Next week, attention turns to the ECB decision, July flash PMIs, and UK public finances, as markets weigh central banks’ willingness to ignore resurgent inflation.

By Philip Rush

July 11, 2025
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HEW: Kicked Can Lands Steady

  • Trump kicked the tariff can a few weeks to 1 August, leaving other policymakers and markets in a wait-and-see mode. Pricing was little changed amid little news elsewhere.
  • We thematically explored the market implications of resilience rolling cuts later, how healthy the US labour market data is, and dug into the UK’s political problems.
  • Next week’s UK labour market and inflation data are critical ahead of an August BoE decision we believe remains finely balanced. US and EA inflation are other highlights.

By Philip Rush

July 04, 2025
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HEW: Payrolls Waking Up Rates Pricing

  • Dovish rate pricing had been ignoring resilient data until US payrolls delivered a rude awakening. We believe rates remain too dovish relative to reality and equity prices.
  • BoE surveys also revealed resilience in defiance of dovish pricing, while the rise in EA unemployment merely matched ECB forecasts and was heavily reliant on Italy.
  • Next week’s deadline for US tariffs is the main risk event, as not all countries will likely get an extension. Monetary policy decisions come from the RBA, RBNZ, BNM, and BOK.

By Philip Rush

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

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