Archive

April 14, 2025
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US Tariffs: Of Words And Bonds

  • Although Donald Trump’s U-turn may allow time for the conclusion of bilateral trade negotiations with some US partners, neither China nor the EU is likely to strike an agreement imminently, especially now that America’s vulnerability to the bond market has become all too clear.

By Alastair Newton

April 11, 2025
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UK: GDP Seasonal Surge Before Slowing

  • Fundamental causes should not be assigned to UK GDP surging far beyond consensus expectations again in February, despite the notability of Q1 growth tracking 0.7% q-o-q.
  • Residual seasonality has dominated the post-pandemic growth profile, and the recent resilience merely matches it. Stagnation for the rest of the year is the consequence.
  • Disruptive and volatile US trade policy will also depress the underlying economic trend beneath the spurious seasonals. We now bake both more fully into our modal forecasts.

By Philip Rush

April 11, 2025
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HEW: Sipping ECB Dove-Juice

  • Volatility in reciprocal and China tariffs disrupted markets again over the past week. Waiting to see the impact in data dampens the relevance of releases, including low US inflation (depressed by a late Easter), and surging UK GDP (residual seasonality).
  • UK unemployment and inflation data risks skew hawkishly next week amid resilient underlying trends and the belated impact of Spring stock landing in clothing store price samples. Market moves also push the ECB towards cutting again on Thursday.

By Philip Rush

April 10, 2025
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US Travel Crashes Inflation In Mar-25

  • Downside news from February’s US CPI print extended into a March crash with a 0.2pp undershoot at -0.05% m-o-m, not just because of a 2.4% m-o-m fall in energy prices.
  • Hotels joined another sharp fall in airfares to drive the core inflation weakness. The late Easter appears responsible, similar to 2023, ahead of an April resurgence.
  • Market participants are unusually unfazed by data that does not reveal the impact of substantial policy changes. Resilience should damp dovish hopes for cuts returning.

By Philip Rush

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