Chief Economist, Heteronomics

Phil Rush

Chief Economist

Heteronomics

Heteronomics represents a different kind of economics. We believe analysis should delve into the details of what is really going on, rather than using overly simplistic assumptions to quick-sell stories. Independence from myopic institutional pressures allows us to focus on the realities underlying your asset allocation decisions, without the conflicts of the old market structures. Heteronomics targets the themes driving UK asset prices, offering the benefits of depth, independence and ultimately price.

UK-centric macro research

Macroeconomics

<ul><li>The Euro has weakened over the past week due to markets focusing on hawkish price and wage inflation, with more emphasis on activity growth rates and PMIs than on unemployment and underlying inflationary pressures.</li><li>The Flash HICP for November may not rise as expected due to base effects such as German package holidays, which is considered a temporary blip.</li><li>Despite most data warning against a 50bp cut, the RBNZ is likely to make this cut again, positioning it as an outlier.</li></ul>

The Euro has weakened over the past week due to markets focusing on hawkish price and wage inflation, with more emphasis on activity growth rates and PMIs than on unemployment and underlying inflationary pressures.The Flash HICP for November may not rise as expected due to base effects such as German package holidays, which is considered a temporary blip.Despite most data warning against a 50bp cut, the RBNZ is likely to make this cut again, positioning it as an outlier.

<ul><li>Upwards revisions to Euro area labour costs and a jump in negotiated wage settlements extend cost growth inconsistent with a sustainable return to the 2% inflation target.</li><li>The ECB hopes this will subside swiftly in 2025, with productivity growth and squeezed profit margins helping contain inflation. But these hopes seem set to be disappointed.</li><li>Persistent wage pressures should prevent a 50bp rate cut in December and limit further cuts. Less dovish fundamentals feed bullish Euro seasonality, magnified by positioning.</li></ul><p></p>

Upwards revisions to Euro area labour costs and a jump in negotiated wage settlements extend cost growth inconsistent with a sustainable return to the 2% inflation target.The ECB hopes this will subside swiftly in 2025, with productivity growth and squeezed profit margins helping contain inflation. But these hopes seem set to be disappointed.Persistent wage pressures should prevent a 50bp rate cut in December and limit further cuts. Less dovish fundamentals feed bullish Euro seasonality, magnified by positioning.

AI Generated Content, Heteronomics

Heteronomics AI

AI Generated Content

<ul><li>Bank Indonesia held the BI-Rate at 6.00%, aligning with expectations, citing controlled inflation within its 2.5% ±1% target and global economic uncertainty as critical factors influencing its cautious stance.</li><li>The central bank's policy framework prioritises Rupiah stability amid geopolitical risks and external pressures, supported by robust foreign reserves of $151.2 billion and macroprudential measures encouraging credit growth in priority sectors.</li><li>Future rate adjustments will depend on inflation trends, external shocks, and global market dynamics, with monetary and fiscal policy synergy essential to sustaining economic resilience and growth into 2025.</li></ul><div><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.</em></div>

Bank Indonesia held the BI-Rate at 6.00%, aligning with expectations, citing controlled inflation within its 2.5% ±1% target and global economic uncertainty as critical factors influencing its cautious stance.The central bank's policy framework prioritises Rupiah stability amid geopolitical risks and external pressures, supported by robust foreign reserves of $151.2 billion and macroprudential measures encouraging credit growth in priority sectors.Future rate adjustments will depend on inflation trends, external shocks, and global market dynamics, with monetary and fiscal policy synergy essential to sustaining economic resilience and growth into 2025.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Indonesia: Policy Rate Held At 6.0% (Consensus 6.0%) in Nov-24

<ul><li>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.</li><li>Underlying inflation also strengthened on other measures, like the median, and looks inconsistent with a sustainable return to the inflation target.</li><li>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.</li></ul><p></p>

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.

<ul><li>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.</li><li>Underlying inflation pressures were broadly above expectations and target-consistent levels. Upwardly revised labour cost growth won’t help sustain 2% HICP inflation.</li><li>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.</li></ul><p></p>

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.