Archive

January 14, 2025
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2025: In Like A Dove, Out Like A Hawk

  • Ongoing economic resilience strengthens the conviction in our long-held view that neutral policy rates are high. Rate cuts outside of a recession are usually reversed.
  • Market pricing aligns with our previously contrarian rate view. As the end of the cutting cycle approaches, pricing should embed the possibility of hikes like in 1998-99.
  • We expect at least the Fed and BoE to hike their policy rates in 2026, with the debate beginning in 2025 and potentially crystalising in a move later this year.

By Philip Rush

January 13, 2025
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Europe: Chaos ex Machina

  • Political uncertainty in Berlin and Paris has created a leadership vacuum in Europe which will not be filled in the foreseeable future. In Germany, investors are getting ahead of the political reality over prospects for reform of the debt brake. France faces another indecisive legislature election in mid-year as Marine Le Pen looks to pressure Emmanuel Macron into stepping down early.

By Alastair Newton

January 10, 2025
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HEW: Happy(ish) New Year

  • Markets began arguably as they will continue in 2025, with little beta and many quirks to source alpha. US payrolls boomed while EA inflation unsurprisingly rose.
  • More releases return next week, with UK inflation our highlight, as low airfares may disappoint many forecasts. US CPI and final EA HICP also matter. It’s still quiet for monetary policy decisions, with Indonesia and Korea the only exceptions.
  • Note: Smartkarma becomes our research portal in January, so clients should set their login details to maintain smooth access (send queries to transition@smartkarma.com).

By Philip Rush

January 08, 2025
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Oil in 2025

  • The threat of trade wars makes forecasting the oil price this year unusually hazardous. However, based on the ‘known knowns’, one can safely assume that the downward pressure we saw through 2024 will persist. My forecast for Brent crude on 31 December is, therefore, USD65 per barrel.

By Alastair Newton

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