Archive

December 08, 2023
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HEW: Poised to Push Back

  • It’s been a quiet week for economic events, leaving us to focus thematically on why rate cuts will likely take longer than markets expect. Past tightening isn’t hitting as hard as feared, and the rise in real rates from disinflation is dovishly misinterpreted.
  • Next week, the BoE, ECB and Fed decisions present opportunities to push back against the prevailing narrative that has drifted too dovish. An ongoing hawkish bias and distance to cut look likely, although markets may discount that amid data-dependence.

By Philip Rush

December 01, 2023
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HEW: Doves Over Skis Pricing Spring Cuts

  • Another disinflationary surprise in the euro area helped fuel dovish pricing, with markets seemingly over their skis betting on spring cuts. We also analysed UK surprises as another lens to our view that the BoE won’t cut rates until 2025.
  • Next week has a thin calendar of economic data releases, albeit with the final services PMIs. The RBA and BoC are scheduled to announce their policy decisions and will likely continue the global trend for no-change decisions.

By Philip Rush

November 24, 2023
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HEW: Mixing Loose Fiscal and Tight Rates

  • The UK Autumn Statement was the main policy event of the past week. It revealed a surprising amount of fiscal stimulus and reinforced excessing wage pressures, putting more burden on the BoE. PMI data were surprisingly strong amid residual seasonality.
  • Flash HICP inflation data for November dominate our calendar. We are below the current consensus again in forecasting a slowing in the headline EA rate to 2.6%. The RBNZ, Thailand and Korea are next up with their monetary policy decisions.

By Philip Rush

November 17, 2023
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HEW: Disinflating More Now Than Later

  • It’s been a busy week for UK data, with disinflationary near-term news reducing the risk of another hike while rapid wage growth should defer cuts longer than markets price. The UK doesn’t share the EA’s success in lowering underlying inflation to target.
  • Flash PMIs are next week’s most prominent data release. Sweden and Indonesia are the only central bank decisions in another quiet week. The UK’s fiscal Autumn Statement may be the main policy event, although most measures tend to leak early.

By Philip Rush

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