Archive

November 20, 2024
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UK Inflation Flies Cuts To 2025

  • A surprising airfare rebound extended CPI inflation’s energised rise to 2.3%. Its higher weighting in core and services measures compounded the upside surprise there.
  • Underlying inflation also strengthened on other measures, like the median, and looks inconsistent with a sustainable return to the inflation target.
  • We still expect inflation to trend above the target in 2025 on excessive unit labour cost pressures. The BoE can remain gradual in its easing cycle, skipping a cut in December.

By Philip Rush

November 19, 2024
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EA Inflation Doesn’t Need A 50bp Cut

  • October's final Euro area inflation print confirmed its surprisingly steep rise to 2% y-o-y. Strength was not only broad across countries but components with median rates rising.
  • Underlying inflation pressures were broadly above expectations and target-consistent levels. Upwardly revised labour cost growth won’t help sustain 2% HICP inflation.
  • Confirmed price and wage inflation strength adds to hawkish GDP and unemployment news, curbing the case for 50bp to remain less likely than the dovish market hopes.

By Philip Rush

November 18, 2024
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US Politics: “Liquid Gold”

  • Donald Trump will do whatever he can to deliver on his promise to cut energy prices in half within 12 months. But factors outside of his control will prevent him from achieving anything more than a modest ‘win’, if that.

By Alastair Newton

November 15, 2024
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HEW: Trump Trade Trends Trump Value

  • The US dollar and rates kept trending higher over the past week, dragging UK yields up despite disappointing unemployment and GDP data. EUR weakness looks too stretched. US inflation data kept a December Fed cut alive, albeit still data-dependent.
  • Aside from Bank Indonesia's decision on Wednesday, it’s another quiet week ahead for monetary policy decisions. UK inflation’s uncontentious jump on regulated energy price changes is our main event, but we also await flash PMIs and final HICP data.

By Philip Rush

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