Archive

December 01, 2023
2023-12-01 HEW_head.png

HEW: Doves Over Skis Pricing Spring Cuts

  • Another disinflationary surprise in the euro area helped fuel dovish pricing, with markets seemingly over their skis betting on spring cuts. We also analysed UK surprises as another lens to our view that the BoE won’t cut rates until 2025.
  • Next week has a thin calendar of economic data releases, albeit with the final services PMIs. The RBA and BoC are scheduled to announce their policy decisions and will likely continue the global trend for no-change decisions.

By Philip Rush

November 24, 2023
hew_head.png

HEW: Mixing Loose Fiscal and Tight Rates

  • The UK Autumn Statement was the main policy event of the past week. It revealed a surprising amount of fiscal stimulus and reinforced excessing wage pressures, putting more burden on the BoE. PMI data were surprisingly strong amid residual seasonality.
  • Flash HICP inflation data for November dominate our calendar. We are below the current consensus again in forecasting a slowing in the headline EA rate to 2.6%. The RBNZ, Thailand and Korea are next up with their monetary policy decisions.

By Philip Rush

November 17, 2023
hew_head.png

HEW: Disinflating More Now Than Later

  • It’s been a busy week for UK data, with disinflationary near-term news reducing the risk of another hike while rapid wage growth should defer cuts longer than markets price. The UK doesn’t share the EA’s success in lowering underlying inflation to target.
  • Flash PMIs are next week’s most prominent data release. Sweden and Indonesia are the only central bank decisions in another quiet week. The UK’s fiscal Autumn Statement may be the main policy event, although most measures tend to leak early.

By Philip Rush

November 10, 2023
hew_head.png

HEW: Overinflated Case for Cuts

  • The past week has been relatively quiet for economic releases. We published our latest monthly and expanded upon the BoE’s persistent problem in follow-up analysis. Central banks behaved as expected, with the RBA hiking while Mexico held and Peru cut again.
  • Next week is thin on policy (only the Philippines) and heavy on inflation releases. We share the consensus views of UK CPI at 4.8% and EA HICP confirming at 2.9%. Post-pandemic seasonality to UK inflation surprises is worryingly hawkish if sustained.

By Philip Rush

By country