Archive

June 13, 2025
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HEW: Geopolitics Blow Hot And Warm

  • Israel’s attack on Iran squeezes supply in an unwelcome shock that is harder for central bankers to look through post-pandemic. Warming US-China relations had less impact.
  • Avoidance measures have helped mitigate the tariff shock so far, with US CPI holding steady. The importance of recent disappointing UK demand data is easy to overstate.
  • The BoE is set to hold rates, probably with two dovish dissents and no commitment to August. UK inflation should slow with airfares normalising and a vehicle tax correction.

By Philip Rush

June 06, 2025
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HEW: Poorly Positioned Doves

  • The ECB was even more hesitant to signal cuts than we expected, with the level after the unsurprising cut now deemed well-positioned. Cuts will require downside news.
  • Disinflationary surprises across the Euro area in the May flash releases are already embedded in that assessment. Doves are poorly positioned for this reaction function.
  • US inflation data may be the most crucial global release next week, although the signal may not be clear. Statistical issues affect the UK labour market and GDP data.

By Philip Rush

May 30, 2025
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HEW: Macro Hokey Pokey

  • Markets danced the Hokey Pokey to a drumbeat of lawfare and whimsical Presidential decrees. Tariffs were in, out, out, in, with tired pricing relatively unchanged overall.
  • Underlying GDP trends remain unbroken by the disruptive announcements of recent months, with the superior US productivity performance still internationally enticing.
  • Next week’s ECB rate cut remains one of the least uncertain macro stories. However, guidance should be much more hesitant about cutting again, while leaning that way.

By Philip Rush

May 23, 2025
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HEW: Fiscal Anxiety As Rates Rise

  • Jitters over the sustainability of US fiscal easing knocked equities and the dollar over the past week. Dovish BoE pricing was pared back further towards our contrarian call.
  • UK inflation exceeded our already elevated forecast, while the manufacturing PMIs were broadly resilient again in May. UK retail data were also sensationally strong.
  • Next week is relatively quiet and shortened by a bank holiday. Flash inflation for some euro member states, updated US GDP data, and the RBNZ decision are our highlights.

By Philip Rush

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