Archive

May 23, 2025
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HEW: Fiscal Anxiety As Rates Rise

  • Jitters over the sustainability of US fiscal easing knocked equities and the dollar over the past week. Dovish BoE pricing was pared back further towards our contrarian call.
  • UK inflation exceeded our already elevated forecast, while the manufacturing PMIs were broadly resilient again in May. UK retail data were also sensationally strong.
  • Next week is relatively quiet and shortened by a bank holiday. Flash inflation for some euro member states, updated US GDP data, and the RBNZ decision are our highlights.

By Philip Rush

May 16, 2025
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HEW: Dovish Arguments Ageing Poorly

  • Equity and rates market prices normalised further as data remains too resilient to prompt cuts, and US trade policy still seems to be reversing its destructive aspects.
  • UK GDP boomed beyond expectations again, albeit amid residual seasonality. US CPI data were soft and stable, as companies appeared to have smoothed the tariff shock.
  • Next week’s UK inflation data could compound the pressure by exceeding the consensus to reach 3.4% on the CPI. The flash PMIs and RBA decision are other timely highlights.

By Philip Rush

May 09, 2025
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HEW: Doves Disappointed By Patience

  • The BoE and Fed decisions disappointed dovish hopes for action by sensibly waiting to see some signs that easing is appropriate. Caution reduces the risk of a policy mistake.
  • Inflation in the US, plus unemployment and GDP in the UK, are the scheduled economic highlights for us next week. The UK data may prove more resilient than feared again.
  • An absence of bad news can allow the good vibes to keep flowing from recent resilient data and trade policy progress, but investors seeking to sleep easy may wish to hedge.

By Philip Rush

May 02, 2025
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HEW: Good News From Less News

  • Dovish fears are failing to find support in the economic data or Trump’s declarations. Underlying activity appears to have remained resilient through the initial US tariff shock and the UK stamp duty rise. EA inflation pressure is also awkwardly unbroken.
  • The Fed will hold rates steady next week, without hard evidence to justify cutting. The BoE is also set to maintain its course with another quarterly 25bp rate cut amid sterling strength compounding commodity price falls. Future cuts by both need more evidence.

By Philip Rush

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