Archive

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

August 12, 2025
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US Inflation Skips Several Months

  • July’s US inflation print reversed all of the increase built in from tariffs over the past several months, despite matching expectations prevailing into the release.
  • Core goods inflation eased slightly, suggesting ongoing corporate success in avoiding the tariff shock. But service inflation is stuck too high to be consistent with the target.
  • Anti-avoidance measures and belated pass-through will drive further rises. We doubt they will be as severe as many fear, yet still not create much space to cut rates.

By Philip Rush

August 11, 2025
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US/Taiwan: Xi Calls The Shots

  • In stark contrast to its dealings with other trade partners, Washington is firmly in the position of supplicant in its dealings with Beijing.
  • This reflects not only Xi Jinping’s carefully prepared and strong hand but also Donald Trump’s seeming determination to strike a deal with China at more or less any cost.
  • Increasingly, therefore, Taiwan stands to be “a pawn in a bigger game”.

By Alastair Newton

August 05, 2025
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Payrolls Challenge Resilient Narrative

  • Revisions drove payrolls into a stagnation that runs contrary to our narrative of rolling resilience, but some contributors are spurious and don’t break the broader strength.
  • Seasonal adjustment caused 76k of the 258k revision. State and local education workers represented 108k, and are lower since April, despite the DOE closure shifting jobs here.
  • Payrolls still grow by 1% y-o-y, like household employment, with JOLTs data fine and the unemployment rate stable. The Fed should resist cutting without follow-through.

By Philip Rush

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