Archive

November 10, 2023
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HEW: Overinflated Case for Cuts

  • The past week has been relatively quiet for economic releases. We published our latest monthly and expanded upon the BoE’s persistent problem in follow-up analysis. Central banks behaved as expected, with the RBA hiking while Mexico held and Peru cut again.
  • Next week is thin on policy (only the Philippines) and heavy on inflation releases. We share the consensus views of UK CPI at 4.8% and EA HICP confirming at 2.9%. Post-pandemic seasonality to UK inflation surprises is worryingly hawkish if sustained.

By Philip Rush

November 03, 2023
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HEW: Policy Holding Pattern

  • Many policy decisions over the past week emphasised data dependence and openness to hiking again, but the global tightening cycle increasingly appears at its end. Surprisingly slow EA inflation data reduces the risk that the ECB will resume hiking again.
  • Next week could contain one of the cycle’s last hikes out of Australia. Peru may keep cutting while Mexico stays on hold, providing a full spectrum of outcomes. It’s a quiet week for economic data, with UK GDP our highlight.

By Philip Rush

October 27, 2023
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HEW: Data Dependent Tests

  • The past week’s releases confirmed our view that UK unemployment increases were spurious as the ONS revised the latest one away. US activity surged, and the Philippines delivered a shock off-cycle hike while Chile disappointed dovish expectations again.
  • Next week’s BoE decision could see the fine balance tilt hawkish this time, contrary to the consensus, but the Fed, BOJ and Norges bank should hold. Brazil should cut, and Colombia may surprise by joining it. We expect a dovish flash EA inflation surprise.

By Philip Rush

October 20, 2023
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HEW: Postponed Activity and the ECB

  • The past week was less impactful in its data amid a thinned-down labour market report and unrevised HICP. However, surprisingly strong UK inflation and a surprise hike in Indonesia provided a hawkish backdrop to an unrelated rise in forward rate pricing.
  • Next week’s postponed UK unemployment data and the flash PMIs are highlights ahead of early November rate decisions. Policy announcements from the ECB, Bank of Canada and Chile provide the warm-up acts for the BoE and Fed (among others) coming later.

By Philip Rush

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