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>Retail sales exceeded consensus expectations again by growing 0.3% m-o-m in August, while Jul-18 was revised up to leave the level over 1% above trend. That leaves more room for negative payback later.</li>
<li>The mixture of a slightly better August and anticipation of a slight September fall balance positively for Q3 GDP growth, but my forecast remains at 0.5% q-o-q for Q3. Backloaded weakness should weigh more on Q4, where I still forecast 0.4%.</li>
</ul>


Retail sales exceeded consensus expectations again by growing 0.3% m-o-m in August, while Jul-18 was revised up to leave the level over 1% above trend. That leaves more room for negative payback later.
The mixture of a slightly better August and anticipation of a slight September fall balance positively for Q3 GDP growth, but my forecast remains at 0.5% q-o-q for Q3. Backloaded weakness should weigh more on Q4, where I still forecast 0.4%.


FLASH: UK Sales Stretch Surprisingly High in Aug-18

<ul>
<li>CPI inflation exceeded all expectations by surging to 2.7% in August instead of slowing. Prices within transport (seafares) and recreation (theatre, AV, games) were responsible for the upside surprise.</li>
<li>Two-thirds of the CPI shock persists in my forecast. This outcome would be another small upside surprise to the BoE, but it gains relevance amid the concentration within the domestic components and alongside upside news in wages and GDP.</li>
<li>A smooth Brexit remains crucial to my relatively hawkish Feb-19 BoE rate hike call.</li>
</ul>


CPI inflation exceeded all expectations by surging to 2.7% in August instead of slowing. Prices within transport (seafares) and recreation (theatre, AV, games) were responsible for the upside surprise.
Two-thirds of the CPI shock persists in my forecast. This outcome would be another small upside surprise to the BoE, but it gains relevance amid the concentration within the domestic components and alongside upside news in wages and GDP.
A smooth Brexit remains crucial to my relatively hawkish Feb-19 BoE rate hike call.


FLASH: Surprise UK Inflation Surge in Aug-18

<ul>
<li>Leaders of the EU27 will discuss Brexit on 20 September. This summit is essential but will not solve all problems and may communicate little concrete progress.</li>
<li>Bullish pressures are most likely to arise from market participants better distinguishing future trade from the withdrawal treaty, in my view.</li>
<li>Rather than throw red meat to rabid dissenters, the details of any significant incremental concessions seem likely to be withheld until the deal concludes.</li>
</ul>


Leaders of the EU27 will discuss Brexit on 20 September. This summit is essential but will not solve all problems and may communicate little concrete progress.
Bullish pressures are most likely to arise from market participants better distinguishing future trade from the withdrawal treaty, in my view.
Rather than throw red meat to rabid dissenters, the details of any significant incremental concessions seem likely to be withheld until the deal concludes.


<ul><li>UK CPI inflation is likely to slow in Aug-18 despite rebounding clothes prices. My headline forecasts are in line with the current consensus (CPI: 2.4%, RPI: 3.2%), but both still sit squarely on the cusp of rounding lower, so there is downside risk.</li></ul>

UK CPI inflation is likely to slow in Aug-18 despite rebounding clothes prices. My headline forecasts are in line with the current consensus (CPI: 2.4%, RPI: 3.2%), but both still sit squarely on the cusp of rounding lower, so there is downside risk.

Preview: Slower UK CPI Inflation in Aug-18

FX Strategist

Greg Gibbs

Fundamental analysis of topical themes in FX

Amplifying Global FX Capital

Amplifying Global FX Capital was founded in 2015 and is fully owned by Greg Gibbs. It is a registered company both in Australia and Colorado, USA and is a licensed in Australia to provide financial services.

We are producing a regular trading view orientated macroeconomic analysis of topical themes in global financial markets, with a particular focus on foreign exchange. We invite you to view an “executive summary” of these reports in “AmpGFX Reports” under our “Research” menu.

These reports are drawn from the analysis of Greg Gibbs and inform the capital management he undertakes on behalf of the company. The trading performance is posted periodically on our website. We aim to build our company into both a research and capital management business. We are currently in the planning phase for managing capital for wholesale customers.

Greg Gibbs has spent his working life of more than 26 years in financial markets, beginning in 1989 at the Reserve Bank of Australia, after completing a Bachelor of Economics Degree (Honours) at the Australian National University. He has been a CFA Charterholder since 2005. He has worked in Sydney, Singapore, New York and London for major global banks and presented on foreign exchange markets to major financial institutions and companies around the world, and maintained a high profile in the financial media.

Before Amplifying Global FX Capital, Greg was the Head of Asia Pacific Market Strategy at the Royal Bank of Scotland based Singapore. He now resides in Breckenridge Colorado.

FX & Rates

Hopes that the US and China will avert an all-out trade war and one low inflation print in the USA have sparked a ray of hope for emerging-market assets.  Hopes that UK PM May can navigate a Brexit plan through a fractured UK parliament have lifted the GBP.  The US mid-term elections are a risk for the continuity of US economic and trade policy.  In these days of extreme controversy over the leadership style of the US President, we cannot discount political chaos come November.  However, evidence of extreme tightening in the US labor market has kept US rates near their recent highs and may yet reassert USD strength.

Hopes that the US and China will avert an all-out trade war and one low inflation print in the USA have sparked a ray of hope for emerging-market assets.  Hopes that UK PM May can navigate a Brexit plan through a fractured UK parliament have lifted the GBP.  The US mid-term elections are a risk for the continuity of US economic and trade policy.  In these days of extreme controversy over the leadership style of the US President, we cannot discount political chaos come November.  However, evidence of extreme tightening in the US labor market has kept US rates near their recent highs and may yet reassert USD strength. 

Wading Through Event Risks – Trade, Brexit, Fed Policy, US Mid-Terms

United Kingdom

The British Pound Sterling is the official currency of The United Kingdom. 

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FLASH: UK Sales Stretch Surprisingly High in Aug-18

Retail sales exceeded consensus expectations again by growing 0.3% m-o-m in August, while Jul-18 was revised up to leave the level over 1% above...

Phil Rush

FLASH: Surprise UK Inflation Surge in Aug-18

CPI inflation exceeded all expectations by surging to 2.7% in August instead of slowing. Prices within transport (seafares) and recreation...

Phil Rush

Brexit: Steps Around the 20 Sep Summit

Leaders of the EU27 will discuss Brexit on 20 September. This summit is essential but will not solve all problems and may communicate little...

Phil Rush

Preview: Slower UK CPI Inflation in Aug-18

UK CPI inflation is likely to slow in Aug-18 despite rebounding clothes prices. My headline forecasts are in line with the current consensus (CPI:...

Phil Rush

Wading Through Event Risks – Trade, Brexit, Fed Policy, US Mid-Terms

Hopes that the US and China will avert an all-out trade war and one low inflation print in the USA have sparked a ray of hope for emerging-market...

Greg Gibbs

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