Heteronomics Archive

February 16, 2024

HEW: Data Deluge Douses Doves

A deluge of UK data revealed a shockingly tight labour market despite a technical recession exaggerated by a spurious fall in retail sales that fully unwound in January. UK inflation was depressed by new weights while the US data lifted hawks.
Next week is quieter, with the final EA inflation print a highlight for us. It is on the cusp of rounding down from 2.75%, but national releases aren’t triggering that yet. Monetary policy announcements are only scheduled from Indonesia and South Korea.

By Philip Rush

February 09, 2024

The past week has been quiet for economic data, leaving us to focus on explaining our hawkish views in the latest Heteronomics Economics Monthly (HEM) and wage analysis. Peru, Mexico, Thailand, India and the RBA announced their policy decisions.
Next week, things will reverse, with only the Philippines announcing rates amid a heavy flow of UK data releases. The old-style LFS UR data are already confirmed to have fallen, as we hawkishly expected. We also forecast CPI inflation to print strong again.

By Philip Rush

February 02, 2024

The Fed explicitly pushed back against a March cut, while BoE forecasts implicitly favoured a later-than-priced start. Yet, dovish market pricing survives. EA GDP growth, services inflation, and blockbuster US payrolls don’t offer reasons to cut in a hurry.
Next week, it’s the turn of the RBA to respond to lower inflation news and the market’s dovish repricing. Thailand, India, Mexico and Peru will also announce their policy decisions amid a cacophony of speeches by central bankers elsewhere.

By Philip Rush

January 26, 2024

Broad and surprising resilience in the flash PMIs continued to defy dovish expectations, and President Lagarde said it was premature to discuss rate cuts. Yet markets price an aggressive easing path that extended slightly in the EA even while the UK parred back.
Next week, the Fed should fail to support expectations for an immediate cut, putting the final nail in the coffin of March pricing. Hawkish BoE guidance through above-target inflation on market rates may not pack much of a punch. EA HICP could print low again.

By Philip Rush