Executive Summary The Dollar Has Broken Above Overhead Resistance Most central banks continue to dial up their hawkish rhetoric, led by the Fed. This is putting upward pressure on the dollar (Feature Chart). The big…
Executive Summary Europe Is Russia's Key Gas Customer Full-on rationing of natural gas by Germany took a step closer to reality, as the standoff with Russia over its insistence on being paid in roubles for gas plays out.…
We do not expect the relief measures announced in UK Chancellor of the Exchequer Rishi Sunak’s spring statement to offset headwinds from rising taxes, higher energy prices, and higher interest rates (see The Numbers).…
UK headline CPI inflation surged to a 30-year high of 6.2% y/y in February, beating estimates of 6.0%. Similarly, core CPI inflation jumped by 0.8 percentage points to 5.2% while the retail price index rose 8.2% y/y following 7.8…
Executive Summary Ebbing Stagflation Fear Will Prompt Rerating European inflation will rise further before peaking this summer. Core CPI will reach between 2.8% and 3.2% by year-end before receding. The combination of…
BoE communication was cautious on Thursday, signaling a need to balance between both upside pressures on inflation and downside risks to growth (see Country Focus). Regarding the latter, the UK economic outlook faces multiple…
As expected, the Bank of England raised the Bank Rate by 25bps to 0.75% on Thursday. However, the central banks’ messaging signaled a somewhat cautious stance. The MPC stated that some further modest tightening in monetary…
Breakeven inflation rates on 10-year inflation-linked bonds have moved significantly higher since the beginning of the Russia-Ukraine war. In the UK, 10-year breakevens have surged by 48bps over this period. This increase in…
Executive Summary Will The War Stall The Expected Downturn In Inflation This Year? The Russia/Ukraine conflict is impacting financial markets across numerous channels – uncertainty, risk aversion, growth expectations…
Executive Summary Upgrade Global Duration Exposure To Neutral The Russian invasion of Ukraine is a stagflationary shock that comes at a difficult time for developed market central banks that have been laying the groundwork…