Archive

June 02, 2023
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HEW: Breathe-In Stretched Spreads

  • Over the past week, a US debt ceiling deal alleviated that risk, while EA inflation resumed its reassuring trend decline. Peak pricing for policy rates eased, but the UK-US spread seems stretched in 2023, despite worrying second-round effects in the UK.
  • Next week’s calendar captures the lull before the mid-month activity data releases, which is stretched slightly by a delay to UK GDP. Q1 EA employment and GDP data on Thursday are a highlight, albeit “old news”. Our monthly will be out on Monday.

By Philip Rush

May 26, 2023
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HEW: Panic Stations Over UK Failings

  • Over the past week, high UK inflation renewed hawkish fears in financial markets and led us to crystalise the upside risk to August, so we expect the BoE to hike then and in June. Global services activity is in rude health, and UK retail trends have flattened.
  • Next week’s calendar features flash inflation releases around the euro area, where we are in line with the current consensus for a 6.3% EA HICP print. Monetary aggregates and EA unemployment are other macro highlights for the month’s end.

By Philip Rush

May 19, 2023
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HEW: Grinding Tighter for Longer

  • Over the past week, the UK unemployment rate rose again but may not be statistically significant. Rapid wage growth remains intolerably high for the BoE. And the final EA inflation print was also too high for the ECB, despite showing some welcome slowing.
  • Next week’s calendar is filled with the flash PMIs, which have recovered to rude health recently. UK inflation always has a special focus for us, and we are slightly below the RPI consensus. Plenty of cost shocks are administered, but food and energy have eased.

By Philip Rush

May 12, 2023
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HEW: Calmly Hiking in a Quiet Spell

  • Over the past week, the BoE followed through on expectations for a 25bp rate hike, despite the usual two dissenters. Excess demand and inflation remain problematic, not helped by GDP’s growth confirmed for Q1.
  • Next week is another relatively quiet one, with labour market data the UK-sourced highlight. Given what they can indicate for underlying inflation pressures, EA inflation data should matter on both sides of the channel. We expect the flash to be confirmed.

By Philip Rush

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