Data for May looked weak across all construction categories in the US, but it is important to note that the weather may have played a major role in this weakness. Meanwhile, there are signs of a rebounding European/UK consumer market.
The week at a glance: UK CPI report is taking the headlines together with Le Pen
Will the UK Service inflation finally soften? The consensus once again hopes that service prices will de-accelerate in the UK, while Le Pen is trying to pour oil on troubled waters in French fixed income.
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Something for your Espresso: Enjoy the breathing space while it lasts..
The weakness in Asian FX is back and there are signs of a bottoming in Oil prices. Will the breathing space only last until next week’s CPI report? Meanwhile, the UK could prove to be a US case T+6.
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UK Inflation Watch: A dovish surprise upcoming
The early consensus for UK inflation next week looks relatively hot given typically benign patterns in March, which are likely underpinned by the Early easter timing. We see a downside surprise of roughly 10-12 bps to consensus.
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UK CPI Watch: Softer than priced in..
We see UK CPI coming in soft relative to expectations and generally find the BoE to be priced too hawkishly compared to peers. Read along why here..
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Something for your Espresso: Is disinflation with us in the room right now?
Wage data is starting to question the disinflation momentum across G3 economies. Can wage data drive prices or is it a false flag?
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UK CPI Nugget: Is something wrong with services?
Markets betting on one of the softest MoM services CPI prints in UK inflation history in January. Feasible? Yes, but…
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Something for your Espresso: May back in Play?
Inflation from the US and UK take center stage. May back in play for both?
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UK CPI Watch: Another milder than usual report
UK core inflation is typically hot in December due to a spike in services costs ahead of Christmas, but there are signs of a weaker-than-usual season in our numbers. Read more here.
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Something for your Espresso: Smack dab at our forecast
UK inflation printed almost exactly smack dab at our forecast. European inflation is waning faster than US inflation, which ought to be reflected in relative market pricing soon.
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UK CPI Watch – A deflationary shock?
Markets are expecting a re-acceleration in November’s inflation number tomorrow with expectations at 0.1% vs 0.0% in October. What do our models tell us, and what should we expect? Our thoughts and findings here.
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Inflation Watch: Another deflation shocker from Europe? UK, Sweden and Norway are under the loop!
Another set of soft inflation numbers is set to be released from Europe in the coming weeks. We see both GBP and NOK inflation surprisingly low for November, while Swedish evidence is a tad more mixed.
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Something for your Espresso: Saudi Arabians losing the battle?
The bearish price action continues in oil, while the BoJ meeting in December is suddenly seen as “live” by market participants. Can BoJ move the needle before year-end?
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Something for your Espresso: China adding to the cyclical momentum (against the USD)
The USD continues to weaken from the morning after a Chinese liquidity injection. Cyclical tailwinds continue despite very dire forward-looking indicators on Western consumption into 2024.
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UK CPI Watch: No path to 2% unless inflation deflates on a monthly basis
The UK CPI report will be put under scrutiny tomorrow morning after “hot” wage numbers released earlier today. The report is likely going to look very soft, but there is still a long way to go until 2% is reached.
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Something for your Espresso: Fuel for disinflationistas?
Market consensus clearly hoping for soft inflation prints from both the UK and the US this week. Will they get more fuel for the disinflationary rally?
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Macro Nugget: Is the UK Prepared for the Winter?
There is no shortage of depressing data coming out of the UK in recent quarters. The question is whether we’ve seen the worst of stagflation. Maybe, but be careful what you wish for
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5 Things We Watch – UK Rates, OPEC, US Manufacturing, ECB & Portfolio
Happy Wednesday, and welcome back to our weekly edition of 5 Things We Watch, where we take you through the 5 things we are currently keeping an eye on in the global macro landscape.
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Out of the Box #17 How would US exceptionalism flip the table for the RoW?
Global trade is shifting and the US economy is still going strong but the dynamics are changing as are the times. How will global macro likely change as a result?
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UK Watch – Are UK assets a go or a nogo?
The UK has received some attention throughout the current economic cycle as they try to combat weakening growth together with inflation way above BoE’s target. Is now the time to buy UK assets, or is it still a nogo? We’ve run the numbers.
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5 Things We Watch – EU Inflation, US Labor Market, European Money Growth, UK Stagflation & IFO
The doves are back after yesterday’s job openings data which signaled a labor market cooling off, allowing consensus to favor a pause in September. As always, there are plenty of things to dive into in this week’s edition.
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Something for your Espresso: USDCNY is now the global bellwether (again)
The panic will subside if the PBoC manages to defend the 7.30 handle in USDCNY. Could we reach “peak China panic” during today’s trading? We look forward to it alongside the FOMC meeting minutes in our morning report.
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Something for your Espresso: A pause with a truckload of ifs
The RBA kept the pause intact despite markets tilting towards a hike and it raises questions ahead of the BoE on Thursday. Is growth back as the driver of central banks? Meanwhile, credit surveys continue to disappoint.
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Something for your Espresso: When UK inflation turns into the most important key figure on earth
We are on CPI alert from the UK this week as the price pressures in the UK are seen as a harbinger for global sticky service inflation developments. If the UK CPI finally starts mirroring the PPI, we may get a piece of positive disinflationary news for global markets?
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Inflation Watch: Why Norway and the UK are the odd ones out on inflation
On the back of the first truly soft inflation report from the US, we take a look at the inflation regimes across all major countries and find Norway and the UK to be the odd ones out. Paying GBP and NOK rates may still make a lot of sense.
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Something for your Espresso: Might need a Bailey in the Espresso this morning..
The Bank of England is caught between a rock and a hard place, and it may be prudent to pour a bit of Bailey in the Espresso for the committee this morning. A 50 bp hike would signal panic, while delivering 25 bp risks jeopardizing the GBP.
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Something for your Espresso: Ooooops, there goes the service sector
The Philly Fed NBOS survey revealed a weakening service sector for the first time in this cycle. Is this the final shoe to drop? The UK meanwhile remains the laggard on inflation.
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Something for your Espresso: Don’t count on Britain leading the neighbours into the abyss
After a shocking CPI report from the UK, one may ponder whether British exceptionalism carries the day or whether we have more price pain in store for the continent. We hold our ground and remain in the “CPI is deaccelerating fast” camp
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Europolitics Watch #1 – The Big Breturn??
Fair warning: anyone believing that the UK is approaching more EU alignment has grossly underestimated the depths of mutual animosity and distrust that’s currently splitting the Tories from within
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Steno Signals #19 – 1, 2, 3, Central bank panic
Is BoE the patient zero in the fight against bond vigilantes? More panic could be upcoming from other central banks soon as real rates are shooting for the stars
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