Archive

April 30, 2024
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EA Core Inflation Softens By Slightly Less

  • EA inflation unsurprisingly remained at 2.4% y-o-y in April, with a 5bps slowing taking it within 1bps of our forecast. Energy and industrial goods continue to weigh temporarily.
  • Services inflation ended a five-month streak at 4%, slowing to 3.7%. That was a tenth higher than we expected again, with the core rate 3bps more resilient at 2.67%.
  • The ECB will be reassured by services inflation slowing, easing a June cut, but ongoing upside surprises urge caution, with September’s cut conditional on progress at the Fed.

By Philip Rush

April 29, 2024
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UK Politics: Early Election?

  • Whether or not the overall outcome of this week’s local elections and by-election is as bad for the Conservatives as expected, Rishi Sunak may be increasingly inclined to give serious thought to a snap general election as challenges mount.

By Alastair Newton

April 25, 2024
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BoE Throwing Cats Among Pigeons

  • Comments from BoE MPC members have roiled market pricing recently amid perceived contradictions between each other and the hawkish flow of macro data.
  • Members make different risk assessments that vary the evidence required to cut. Shocks this month are insufficient to break the dovish belief in disinflationary progress.
  • Further resilience would encourage MPC members to delay their dovish hopes, just as it did with the FOMC. An unlikely hasty cut risks repeating the BoE’s 2005 policy error.

By Philip Rush

April 24, 2024
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Oil: When The Facts Change…

  • Changing ‘facts’ in the Middle East and more widely are making prospects for the price of oil even more murky, as is underlined by the wide range of forecasts among market analysts. What is clear, however, is that the escalation in Iran/Israel tensions has skewed risks firmly to the upside.

By Alastair Newton

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