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 MPC voted unanimously to leave policy unchanged in November.</li>
<li>Inflation forecasts were maintained rather than being trimmed, contrary to my expectations. This stability maintains more hawkish pressure in their trade-off.</li>
<li>No guidance was issued about when rates might increase next, but that is unsurprising amid acute uncertainty in the Brexit process.</li>
</ul>


The MPC voted unanimously to leave policy unchanged in November.
Inflation forecasts were maintained rather than being trimmed, contrary to my expectations. This stability maintains more hawkish pressure in their trade-off.
No guidance was issued about when rates might increase next, but that is unsurprising amid acute uncertainty in the Brexit process.


FLASH: BoE Temporarily Treads Water in Nov-18

<ul>
<li>The 2018 Budget accounted for the previously announced spending splurge on the NHS and was otherwise broadly neutral. It was paid for by recent good fiscal news, as I expected.</li>
<li>Gross cash requirements were trimmed as expected, but there was also a surprising reliance on expensive funding from NS&amp;I. Combined with a small cut in T-Bills, planned gilt issuance shrunk significantly for the rest of 2018-19.</li>
<li>Fiscal targets are forecast to be met, but there is a complacent failure to close the deficit. Brexit developments may make concerns about such fiscal laxity moot.</li>
</ul>


The 2018 Budget accounted for the previously announced spending splurge on the NHS and was otherwise broadly neutral. It was paid for by recent good fiscal news, as I expected.
Gross cash requirements were trimmed as expected, but there was also a surprising reliance on expensive funding from NS&amp;I. Combined with a small cut in T-Bills, planned gilt issuance shrunk significantly for the rest of 2018-19.
Fiscal targets are forecast to be met, but there is a complacent failure to close the deficit. Brexit developments may make concerns about such fiscal laxity moot.


<ul>
<li>The UK economic outlook remains bifurcated by EU withdrawal negotiations. Until the BoE knows the outcome and reactions to it, any guidance can only be conditional. I expect the MPC to avoid being overly explicit about its next move.</li>
<li>Better demand news is more than offset by the tightening in monetary conditions since August, in my view. Inflation forecasts may be trimmed far enough to be marginally below target, which would discourage extending hawkish market moves.</li>
<li>Expectations for excess demand building still mean forecasts are ultimately hawkish, assuming a smooth Brexit and Sterling stability. Although I still forecast the next BoE hike in Feb-19, I expect unanimous votes for no change this </li>
</ul>


The UK economic outlook remains bifurcated by EU withdrawal negotiations. Until the BoE knows the outcome and reactions to it, any guidance can only be conditional. I expect the MPC to avoid being overly explicit about its next move.
Better demand news is more than offset by the tightening in monetary conditions since August, in my view. Inflation forecasts may be trimmed far enough to be marginally below target, which would discourage extending hawkish market moves.
Expectations for excess demand building still mean forecasts are ultimately hawkish, assuming a smooth Brexit and Sterling stability. Although I still forecast the next BoE hike in Feb-19, I expect unanimous votes for no change this 


<ul>
<li>The UK's 2018 Budget must balance good fiscal news against a significant spending commitment to the NHS. I expect borrowing projections to become broadly flat, while the fiscal targets keep being met, but Brexit news may up-end the outlook.</li>
<li>Borrowing in 2018-19 is likely to be revised much lower, to under £25bn on the PSNB and about £31.5bn on the CGNCR. The £9.2bn improvement in the latter should be subtracted from T-Bill issuance, in my view, to aid financing’s flexibility.</li>
</ul>


The UK's 2018 Budget must balance good fiscal news against a significant spending commitment to the NHS. I expect borrowing projections to become broadly flat, while the fiscal targets keep being met, but Brexit news may up-end the outlook.
Borrowing in 2018-19 is likely to be revised much lower, to under £25bn on the PSNB and about £31.5bn on the CGNCR. The £9.2bn improvement in the latter should be subtracted from T-Bill issuance, in my view, to aid financing’s flexibility.


Preview: UK Splurging the Surplus Before Brexit

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

In our October International Strategy, we provide a synopsis on current market conditions around the globe, and explore the following themes in further detail:<ul>
<li>Supporting our cautious outlook, cyclical and growth Sectors are breaking down on the international front - namely Technology and Consumer Discretionary.  </li>
<li>Overweight Norway.</li>
<li>Price support holding in Japan as RS improves. </li>
<li>Health Care remains attractive, especially defensive pharma Groups within Japan and Europe.</li>
</ul>

In our October International Strategy, we provide a synopsis on current market conditions around the globe, and explore the following themes in further detail:
Supporting our cautious outlook, cyclical and growth Sectors are breaking down on the international front - namely Technology and Consumer Discretionary.  
Overweight Norway.
Price support holding in Japan as RS improves. 
Health Care remains attractive, especially defensive pharma Groups within Japan and Europe.


Global Equity Strategy: Market Deterioration Continues; Cyclical & Growth Sectors Breaking Down

United Kingdom

SPDR FTSE UK All Share ETF is an open ended, UCITS IV compliant exchange traded fund, domiciled in Ireland. The fund's objective is to track the performance of FTSE All Share Index. The Fund invests in physical securities in the index.

SPDR FTSE UK All Share (FTAL LN)

FLASH: BoE Temporarily Treads Water in Nov-18

The MPC voted unanimously to leave policy unchanged in November. Inflation forecasts were maintained rather than being trimmed, contrary to my...

Phil Rush

UK Budget: Surplus Splurged

The 2018 Budget accounted for the previously announced spending splurge on the NHS and was otherwise broadly neutral. It was paid for by recent...

Phil Rush

Preview: BoE Holding Out for Brexit News

The UK economic outlook remains bifurcated by EU withdrawal negotiations. Until the BoE knows the outcome and reactions to it, any guidance can...

Phil Rush

Preview: UK Splurging the Surplus Before Brexit

The UK's 2018 Budget must balance good fiscal news against a significant spending commitment to the NHS. I expect borrowing projections to become...

Phil Rush

Global Equity Strategy: Market Deterioration Continues; Cyclical & Growth Sectors Breaking Down

In our October International Strategy, we provide a synopsis on current market conditions around the globe, and explore the following themes in...

Vermilion Research