Heteronomics Archive

March 07, 2025

HEW: Political Blunderbuss

Shot from Trump’s blunderbuss is hitting sentiment and risk appetite yet the hard data remain resilient. Europe waking up on defence punched markets more in hope than reality, but hawkish inflation and ECB news helped create room to close our bullish call.
Next week’s US inflation data are the scheduled global highlight, along with the Bank of Canada likely pausing its cutting cycle. We also await UK GDP data confirming resilience inconsistent with the dovish panic at February’s BoE meeting.
Note: Smartkarma is now the sole distributor of our research, so clients will only receive all other research from Smartkarma (queries to transition@smartkarma.com).

By Philip Rush

February 28, 2025

Resilience in Euro area price and wage inflation, ESI surveys, and hawkish comments in the latest meeting accounts were trumped by US events. Renewed tariff threats and soft US surveys led a dovish repricing for the Fed that also dominated for the ECB.
Next week has more top tier releases, starting with flash EA inflation for February where we are still a tenth above consensus at 2.4%. That won’t stop the ECB cutting, but should encourage restraint for April. US payrolls and tariffs are the other highlights.
Note: Smartkarma is now the sole distributor of our research, so clients will only receive all other research from Smartkarma (queries to transition@smartkarma.com).

By Philip Rush

February 21, 2025

This week, the flurry of hawkish UK data extended into a torrent, with unemployment, wages, inflation, retail sales, and the flash PMI drowning dovish assumptions. Repriced rates don’t reflect the reality in the macro data where reversing hikes may be needed.
Final Euro area inflation data and monetary policy decisions from Korea and Thailand are highlights incapable of changing global narratives. Negotiated EA wage data, policy speeches, and Trump’s regular shouting into the void may dominate instead.
Note: Smartkarma is now the sole distributor of our research, so clients will only receive all other research from Smartkarma (queries to transition@smartkarma.com).

By Philip Rush

February 14, 2025

Resurgent US inflation and UK GDP growth sicken dovish arguments, even if the turn is exaggerated by residual seasonality in H1. We now see the Fed’s next move as a hike. Uruguay joined Brazil as another hawkish canary by hiking, while BSP didn’t cut.
It’s the RBA and RBNZ’s turn next week, where cuts are expected, but they are lagging behind the global policy cycle, not leading it. UK inflation, unemployment and wage data will be the highlights for us, along with FOMC minutes and flash PMIs.
Note: Smartkarma is now the sole distributor of our research, so clients will only receive all other research from Smartkarma (queries to transition@smartkarma.com).