Archive

November 15, 2024
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HEW: Trump Trade Trends Trump Value

  • The US dollar and rates kept trending higher over the past week, dragging UK yields up despite disappointing unemployment and GDP data. EUR weakness looks too stretched. US inflation data kept a December Fed cut alive, albeit still data-dependent.
  • Aside from Bank Indonesia's decision on Wednesday, it’s another quiet week ahead for monetary policy decisions. UK inflation’s uncontentious jump on regulated energy price changes is our main event, but we also await flash PMIs and final HICP data.

By Philip Rush

November 08, 2024
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HEW: Rates React To Politics

  • A surprising US election result gave Trump a solid platform to implement his plans and borrow more. Fiscal loosening should trim cutting cycles, but the Fed, BoE and Riksbank all cut. Peru signalled rates near neutral after its 25bp cut, while Brazil hiked by 50bp.
  • Mexico is almost alone in announcing rates next week, although many central bankers have speeches scheduled. Labour market data on Tuesday are the UK’s highlight, while Wednesday’s US inflation data are the most prominent global event in the calendar.

By Philip Rush

November 01, 2024
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HEW: Trumping Blighty

  • High taxes, government spending and borrowing in Blighty (Britain) combined with Euro area inflation to drive hawkish market moves. US pricing failed to keep pace, although disappointing payroll data were only partly to blame.
  • US election results on Wednesday are a toss-up, raising the risk of Trump contesting the outcome and the possibility that other countries exploit the political void. It should not affect the BoE or Fed defying low unemployment to cut rates by 25bp on Thursday.

By Philip Rush

October 25, 2024
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HEW: Shades of Fiscal Pressures

  • Resilient US PMIs and rising odds of a Trump victory have kept lifting rates. However, the Bank of Canada matched dovish expectations with a 50bp cut, and European PMIs disappointed again. We believe Europe’s labour market resilience is underappreciated.
  • Next week’s calendar is packed. The UK’s long-awaited Budget will clarify what trial balloons will fly and how much more it will tax, spend, borrow and hope. Distorted US payrolls are the lead data release, although we expect a lesser EA inflation rebound.

By Philip Rush

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