BoE Deputy Governor Clare Lombardelli reinforced the case for a “gradual and careful” approach to policy easing in a speech today. She noted underlying inflation “have continued to fall” despite noises. Monetary policy is still restrictive and will continue to balance the need to lower inflation with the risk of undermining already soft demand. Lombardelli…
Last week was dominated by developments out of the US and UK, not just because of monetary policy decisions, but also the unexpected announcement of a US-UK trade deal. Fed’s hold and BoE’s cut were were largely overshadowed by the surprise trade breakthrough. Importantly, the structure of the agreement offered valuable insights into the US…
Summary United States: Risks Have Risen (but Haven’t Materialized Yet) The trade deficit blew a hole in Q1 productivity growth, and tariffs are anecdotally increasing price pressures in the services sector. But beyond temporary trade-related distortions, tariffs have yet to meaningfully impact the economic data. We anticipate that tariffs will be negotiated down from current…
Markets The Bank of England stuck to its quarterly cutting pace in place since August of last year. They lowered the key policy rate by 25 bps to 4.25% in a 3-way vote. Five out of nine members supported the decision with two in favour of a larger, 50 bps, rate cut and two in…
UK manufacturing continued to contract in April, with PMI finalized at 45.4, a modest rise from March’s 44.9. The sector is facing mounting challenges as output, new orders, and exports all declined further. Business confidence also fell to its lowest level since late 2022, reflecting growing unease over global trade disruptions and rising input costs….
Advertisement     The British government has released new draft laws that extend pre-existing financial regulations to include cryptocurrencies. This aligns the British approach to digital assets with that of the United States, a novel approach that distances itself from European methods of regulation. Rachel Reeves, UK financial minister, said that Britain was bringing…
Markets April EMU PMI surveys showed business activity broadly unchanged. The composite gauge dipped from 50.9 to 50.2 (vs 50.1 expecting), narrowly holding above the boom/bust level (50) for the fourth consecutive month. There were contrasting trends between marginally decreasing business activity in services (49.7 from 51) and the manufacturing sector holding up better than…
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ECB is expected to trim rates, but the BoC might pause this time. CPI data also in the spotlight; due in UK, Canada, New Zealand and Japan. Retail sales the main release in the United States. China GDP eyed as Beijing not spared by Trump. ECB puts rate pause on the back burner The European…
US equity markets tumbled due to President Trump’s tariff proposals, raising global growth concerns. Federal Reserve Chair Jerome Powell acknowledged tariffs’ impact, emphasizing monitoring inflation and waiting for more data. The upcoming week focuses on further tariff developments, US jobs data, and central bank decisions in Australia and New Zealand. Technical analysis shows that the…
Risk Assets continue to struggle despite some gains in the S&P 500 and Dow Jones. It highlights investor concerns about US trade policies and the Federal Reserve’s stance on inflation. On the economic data front, we have PMI and inflation figures in the US, Europe, UK, and Asia Pacific. We also key events like Japan’s…