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 ONS’s second estimate of UK Q2 GDP growth was unrevised from 0.3% q-o-q in real terms, although stronger services prices meant nominal growth was revised up over 0.1pp to 0.74% q-o-q (output-based measure).</li>
<li>A surge in services output during June leaves an unusually large statistical carry-over effect to Q3. Flat output throughout the third quarter would result in a growth rate of 0.35% q-o-q, which supports my relatively bullish forecast (0.4%).</li>
<li>
Higher price inflation alone does not explain…</li>
</ul>


The ONS’s second estimate of UK Q2 GDP growth was unrevised from 0.3% q-o-q in real terms, although stronger services prices meant nominal growth was revised up over 0.1pp to 0.74% q-o-q (output-based measure).
A surge in services output during June leaves an unusually large statistical carry-over effect to Q3. Flat output throughout the third quarter would result in a growth rate of 0.35% q-o-q, which supports my relatively bullish forecast (0.4%).

Higher price inflation alone does not explain…


FLASH: UK Q2 GDP Strengthens Q3 and Nominally

<ul>
<li>The UK LFS unemployment rate declined another tenth to 4.4%, contrary to the consensus, but in line with my forecast again. It is now below the BoE’s estimate of the NAIRU, with a risk of further falls ahead.</li>
<li>Pay growth also improved, with average weekly earnings ex-bonuses now growing by 2.1% y-o-y 3mma. The private sector has been recovering since March and is imparting an unusually strong quarterly impulse.</li>
<li>
Low unemployment makes the MPC’s trade-off more uncomfortable while rising pay reduces a…</li>
</ul>


The UK LFS unemployment rate declined another tenth to 4.4%, contrary to the consensus, but in line with my forecast again. It is now below the BoE’s estimate of the NAIRU, with a risk of further falls ahead.
Pay growth also improved, with average weekly earnings ex-bonuses now growing by 2.1% y-o-y 3mma. The private sector has been recovering since March and is imparting an unusually strong quarterly impulse.

Low unemployment makes the MPC’s trade-off more uncomfortable while rising pay reduces a…


<ul>
<li>UK retail sales grew by 0.5% m-o-m (ex-auto fuel) in July, which was slightly faster than expected. Food sales drove the increase.</li>
<li>Annual and 3m-o-3m growth has slowed slightly. Other measures of retail sales have not slowed, so the ONS data now appear to be gloomy outliers.</li>
<li>With quarterly real income growth and PPI compensation payouts no longer down heavily on last year, this drag on resources and expenditure has alleviated.</li>
</ul>The retail sector enjoyed another month of unusually stable consumer…


UK retail sales grew by 0.5% m-o-m (ex-auto fuel) in July, which was slightly faster than expected. Food sales drove the increase.
Annual and 3m-o-3m growth has slowed slightly. Other measures of retail sales have not slowed, so the ONS data now appear to be gloomy outliers.
With quarterly real income growth and PPI compensation payouts no longer down heavily on last year, this drag on resources and expenditure has alleviated.
The retail sector enjoyed another month of unusually stable consumer…

FLASH: UK Retail Sales Relax While Resources Recover

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

DXY - Long DXY (as a Euro hedge) from 93.00 (via UUP) with a stop below 92. Corrective rise targets 95.30/50 with scope to 96.50 stemming from Euro short covering. Immediate pivot lies at 94.20/23 and would induce further USD short covering.Two factors that would see accelerated USD short covering are 1) A spike in yield 2) Equity fallout lending support to the USD particularly against Asian and EM FX.Key pivot points for the USD are: 1) T-Note 125.90 is a key pivot for yield 2) USD/JPY 111 for…

DXY - Long DXY (as a Euro hedge) from 93.00 (via UUP) with a stop below 92. Corrective rise targets 95.30/50 with scope to 96.50 stemming from Euro short covering. Immediate pivot lies at 94.20/23 and would induce further USD short covering.Two factors that would see accelerated USD short covering are 1) A spike in yield 2) Equity fallout lending support to the USD particularly against Asian and EM FX.Key pivot points for the USD are: 1) T-Note 125.90 is a key pivot for yield 2) USD/JPY 111 for…

USD Cover Pressure with Weaker EM FX Linked to Equity Peaks

<ul>
<li>UK CPI inflation disappointed the consensus again by holding at 2.6% in July, in line with my forecast. The underlying inflationary impulse and trend strengthened.</li>
<li>Transport prices weighed most, as expected. The offsetting news in my forecast was from weaker games &amp; toys and strength in car insurance and clothing. Payback looks set to occur in all of these areas between August and September.</li>
<li>
Weighting changes for 2017 shifted the underlying seasonality and may contribute to more market surprises.…</li>
</ul>


UK CPI inflation disappointed the consensus again by holding at 2.6% in July, in line with my forecast. The underlying inflationary impulse and trend strengthened.
Transport prices weighed most, as expected. The offsetting news in my forecast was from weaker games &amp; toys and strength in car insurance and clothing. Payback looks set to occur in all of these areas between August and September.

Weighting changes for 2017 shifted the underlying seasonality and may contribute to more market surprises.…


UK Inflation: Awaiting Final Autumnal Ascent

United Kingdom

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

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FLASH: UK Q2 GDP Strengthens Q3 and Nominally

The ONS’s second estimate of UK Q2 GDP growth was unrevised from 0.3% q-o-q in real terms, although stronger services prices meant nominal growth...

Phil Rush

UK Jobs and Pay Both Beat for a Change

The UK LFS unemployment rate declined another tenth to 4.4%, contrary to the consensus, but in line with my forecast again. It is now below the...

Phil Rush

FLASH: UK Retail Sales Relax While Resources Recover

UK retail sales grew by 0.5% m-o-m (ex-auto fuel) in July, which was slightly faster than expected. Food sales drove the increase. Annual and...

Phil Rush

USD Cover Pressure with Weaker EM FX Linked to Equity Peaks

DXY - Long DXY (as a Euro hedge) from 93.00 (via UUP) with a stop below 92. Corrective rise targets 95.30/50 with scope to 96.50 stemming from Euro...

Thomas Schroeder

UK Inflation: Awaiting Final Autumnal Ascent

UK CPI inflation disappointed the consensus again by holding at 2.6% in July, in line with my forecast. The underlying inflationary impulse and...

Phil Rush

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