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>Gas and electricity prices have jumped amid a perfect storm of supply pressures, especially in the UK, where the infrastructure has failed in storage and through fire. </li>
<li>The extreme moves concentrate this winter, causing our typically accurate model to suffer. We now implement the regulator’s full model. The peak RPI y-o-y impact now looks less to us, at 89bps, and a small cut could occur with contract rolls in Oct-22.</li>
</ul>


Gas and electricity prices have jumped amid a perfect storm of supply pressures, especially in the UK, where the infrastructure has failed in storage and through fire. 
The extreme moves concentrate this winter, causing our typically accurate model to suffer. We now implement the regulator’s full model. The peak RPI y-o-y impact now looks less to us, at 89bps, and a small cut could occur with contract rolls in Oct-22.


<ul>
<li>Retail sales delivered another substantial disappointment by declining for the fourth consecutive month in August. Declines remained broad-based rather than reflecting a normalisation towards services, and restaurant bookings are falling in September.</li>
<li>Post-holiday quarantine has overtaken the “pingdemic”, with more adults than ever forced into isolation (nearly a million). Further disruption is likely to return with the schools. Consumers remain gloomy about their situation and are not splurging savings.</li>
</ul>


Retail sales delivered another substantial disappointment by declining for the fourth consecutive month in August. Declines remained broad-based rather than reflecting a normalisation towards services, and restaurant bookings are falling in September.
Post-holiday quarantine has overtaken the “pingdemic”, with more adults than ever forced into isolation (nearly a million). Further disruption is likely to return with the schools. Consumers remain gloomy about their situation and are not splurging savings.


<ul>
<li>The UK’s rapid recovery phase ended in July with GDP only limping up by 0.1% m-o-m, despite output still languishing 2.4% below the pre-covid level. Only the most depressed sectors even expanded, with most of the economy slipping further from their peaks.</li>
<li>It is hard to find an optimistic angle, but seasonal factors may have distorted the recovery profile. We now track Q3 GDP growth at 1.4%, which is below our already gloomy forecast for H2 before any covid-related restrictions return.</li>
</ul>


The UK’s rapid recovery phase ended in July with GDP only limping up by 0.1% m-o-m, despite output still languishing 2.4% below the pre-covid level. Only the most depressed sectors even expanded, with most of the economy slipping further from their peaks.
It is hard to find an optimistic angle, but seasonal factors may have distorted the recovery profile. We now track Q3 GDP growth at 1.4%, which is below our already gloomy forecast for H2 before any covid-related restrictions return.


Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Technical Analysis

Further signs of USD weakness are coming through. The breaks on the DXY Index as well as the ones on key major currency pairs show that there is still more USD weakness to be seen before we might stabilise.

Further signs of USD weakness are coming through. The breaks on the DXY Index as well as the ones on key major currency pairs show that there is still more USD weakness to be seen before we might stabilise.

<ul>
<li>Retail sales crashed in July, and together with downwards revisions, depressed the consensus by about 4pp. Weakness was broad-based and does not indicate a rotation back to services as restaurant bookings also declined that month.</li>
<li>The pingdemic forced almost a million to isolate, with many more disrupted. Legal obligations still impact ~700k in mid-August as quarantine mandates rise with holidays. Households continue to signal disappointment by not expecting to share in the recovery.</li>
</ul>


Retail sales crashed in July, and together with downwards revisions, depressed the consensus by about 4pp. Weakness was broad-based and does not indicate a rotation back to services as restaurant bookings also declined that month.
The pingdemic forced almost a million to isolate, with many more disrupted. Legal obligations still impact ~700k in mid-August as quarantine mandates rise with holidays. Households continue to signal disappointment by not expecting to share in the recovery.


United Kingdom

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

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UK: Energy Jump into a Forward Roll Down

Extreme gas and electricity moves concentrate into this winter. However, the peak UK RPI y-o-y impact now looks less to us, at 89bps, and a small...

Phil Rush

UK: On Holiday from Retail

Post-holiday quarantine has overtaken the “pingdemic”, with more adults than ever forced into isolation. Further disruption is likely to return...

Phil Rush

UK: RIP Rapid Recovery

The UK’s rapid recovery phase ended in July, despite output languishing 2.4% below peak. Only the most depressed sectors even expanded, with most...

Phil Rush

Fresh USD Breaks

Further signs of USD weakness are coming through against major currencies. These all suggest there is still more USD weakness to be seen at least...

Shyam Devani

UK: Retail Crashes into Pingdemic

The pingdemic crashed UK consumption in July and legal obligations still impact almost as many in mid-August. Households continue to signal...

Phil Rush

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