Archive

August 26, 2025
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Russia/Ukraine: What Now?

  • A week after the event, it is clear that the Trump/Putin summit presented the latter with a big win at little, if any, cost.
  • Donald Trump is unlikely to come up with anything that will bring Mr Putin to the negotiating table in good faith once his latest two-week ‘deadline’ expires.
  • Furthermore, Mr Trump remains philosophically inclined to favour Russia, a leaning that probably poses a greater risk to Kyiv than Mr Putin himself does.

By Alastair Newton

August 20, 2025
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EA: Sticky Inflation Survives Euro’s Surge

  • Inflation’s surprise stickiness at 2% was confirmed in the Euro area’s final print, with pressures broad based and slightly above a target-consistent pace in most countries.
  • There has been little progress in inflation’s latent trend or our persistence-weighted measure, despite the Euro’s substantial and sustained appreciation.
  • Without dovish second-round effects, the ECB can look through a potential slowing in headline inflation to a tight labour market and persistent pressures, then not cut rates.

By Philip Rush

August 20, 2025
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UK CPI Trend Extends Excess In July

  • Another upside surprise in UK CPI inflation extended the accumulated drift to 1.3pp over the past year, yet was only 0.2pp above our old call.
  • This outcome matched the BoE’s latest call, with airfares driving the rise, and median pressures holding slightly above a target-consistent pace, so there is less policy impact.
  • The MPC was finely balanced in its support for August’s cut, and this rise will not lead dissenters to support past action, let alone another cut, which we still doubt occurs.

By Philip Rush

August 19, 2025
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EA: Re-Balance Of Payments

  • An end to the Euro’s bullish trend is now revealed to have coincided with a reversal of two critical supports. Frontloaded export levels have normalised without payback.
  • International portfolio investment into the EA during April fully unwound between May and June, revealing no investor appetite to hold higher allocations to EA assets.
  • The Euro is not benefiting from a structural shift towards it, so we doubt the bullish trend will resume. Belated payback in goods inventories could also eventually weigh.

By Philip Rush

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