Archive

July 24, 2024
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PMIs Persist Past Softening Seasonals

  • The PMIs proved surprisingly resilient in the flash releases for July, especially in the US where its already high level pushed up further rather than converge down to its peers.
  • Residual seasonality should be depressing the activity data, as appears to have occurred in the EA. Other US data softened, including the ISM, leaving the PMI as an outlier.
  • Central banks seem set to conclude that policy is still tight amid broader softening signals. Indeed, we still expect the Fed to start a short rate-cutting cycle in September.

By Philip Rush

July 22, 2024
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Trading Trump 2.0

  • Donald Trump’s running mate, JD Vance, offered a handful of headlines on economic policy in his nomination speech last week. Look more widely, and clues as to what these may mean in practice are to be found even if determining the details of a ‘Trump Trade’ remains challenging.

By Alastair Newton

July 18, 2024
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UK: Slow Slackening Progress for Pay

  • The UK unemployment rate remained at 4.4% in May as the H1 increases are grinding to a halt in a similar pattern to 2023. Underlying changes are also becoming more neutral.
  • Weekly vacancies data have rebounded to March levels while redundancies remain low and monthly pay growth is consistently annualising above 5%.
  • The dovish BoE can welcome a renewed slowing in the headline wage growth rate despite current levels remaining inconsistent with the inflation target.

By Philip Rush

July 18, 2024
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ECB: September Cut Not Yet Determined

  • The ECB unanimously held its policy rates in July, as widely expected after June’s cut, and refused to pre-commit to any outcome in September.
  • Its policy will depend on the data in the weeks and months ahead, with some policymakers likely to firm up their positions before September’s highlighted meeting.
  • We still expect another cut in September, encouraged by the Fed and BoE also easing policy. However, their premature steps could swiftly require reversals in 2025.

By Philip Rush

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