Archive

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

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

US CPI Inflation 2.97% y-o-y (consensus 3.1%) in Jun-24

- US CPI inflation for June 2024, at 2.97% y-o-y, is below the consensus and demonstrates successfully moderating inflationary pressures.
- Core inflation is higher, at 3.3%, but the monthly impulse reassuringly slowed to 0.1%. Mixed PPI trends indicate some price pressures persist, but the Fed is increasingly likely to cut in September.

US Nonfarm Payroll Change 206k (consensus 190k) in Jun-24

- US Nonfarm Payroll additions for June 2024 exceeded expectations but reflected a slowdown compared to previous months, with private sector hiring displaying significant deceleration.
- Rising unemployment and modest wage growth compound evidence of a weakening labour market, encouraging a Fed rate cut soon.