Archive

HEW: Playing For Time

• US diplomacy with Iran has been given two weeks, bringing it close to the reciprocal tariff deferral date. Both may roll later, while central bankers wait to see the impact.
• Unsurprising UK and EA inflation data offered little direction, nor did the BoE or Fed. Brazil and Norway delivered opposite surprises outside a flood of cautious statements.
• Next week is much quieter for data and decisions (TH and MX). The flash PMIs are the main global highlight, although some HICP and PCE data are notable on Friday.

By Philip Rush

BoE Still Seeking Evidence

• Guidance around an unsurprisingly unchanged BoE rate preserved the necessary uncertainty about when it might ease again, albeit with a broad bias to do more later.
• Dave Ramsden joined the dovish dissent, taking it to three for a 25bp cut, but none of them are in the MPC majority revealed in May as leaning towards a slower pace of cuts.
• We believe the August decision remains finely balanced for the majority. Ongoing data resilience, discouraging the Fed and ECB from easing, should also keep the BoE on hold.

By Philip Rush

Philippines: 25bp Rate Cut to 5.25% (Consensus 5.25%) in Jun-25

• The Bangko Sentral Ng Pilipinas (BSP) reduced its Target RRP Rate by 25 basis points to 5.25%, a move that aligned with consensus forecasts and was prompted by a sharply lower inflation outlook for 2025.
• The decision reflects growing concerns over a global economic slowdown, persistent US trade policy uncertainty, and a widening domestic output gap, all of which argue for a more accommodative monetary stance.
• Future rate decisions will hinge on inflation dynamics, external policy shifts—especially from the US Federal Reserve—and the effectiveness of monetary easing in supporting domestic growth without compromising price stability

SNB: 25bp Rate Cut To 0.0% (Consensus 0.0%) in Jun-25

• The SNB lowered its policy rate to 0% as expected, responding to declining inflation and subdued price pressures, with the latest forecasts indicating inflation will remain well within the price stability range through 2027.
• The SNB’s guidance remains cautious, highlighting global trade tensions, external risks, and persistent uncertainties as key factors shaping the interest rate outlook.
• Future policy decisions will be data-driven, with the SNB prepared to adjust rates further or intervene in currency markets if inflation deviates from target or if external shocks intensify.