Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Provide Comprehensive Analysis & Commentary

SAV Markets

SAV Markets aims to provide comprehensive analysis & commentary on foreign exchange and asset markets. The approach is multi asset as markets are typically interlinked. Cause and effect are always at work, even if those effects take time to manifest. As nothing is permanent we strive to get ahead of the curve in an ever changing world.

Cross Asset Strategy

<ul>
<li>As we prepare for the FOMC there are patterns to watch beyond the short term</li>
<li>The risk of lower yields still persists, especially given the curve inversion</li>
<li>As a consequence we are likely to see further gains in US equities</li>
</ul>


As we prepare for the FOMC there are patterns to watch beyond the short term
The risk of lower yields still persists, especially given the curve inversion
As a consequence we are likely to see further gains in US equities


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 British consumer continued suffering from painfully high inflation in June, with no significant real growth since Oct-21 creating an annual decline near 6%.</li>
<li>Food sales were relatively high in June but should probably be read relative to the deep drop in May amid bank holiday changes. April’s similar rise was revised away.</li>
<li>Non-Retail consumption is also being squeezed. New car sales are trending down at near a 20% annual pace. Consumers are being forced to drop discretionary purchases.</li>
</ul>


The British consumer continued suffering from painfully high inflation in June, with no significant real growth since Oct-21 creating an annual decline near 6%.
Food sales were relatively high in June but should probably be read relative to the deep drop in May amid bank holiday changes. April’s similar rise was revised away.
Non-Retail consumption is also being squeezed. New car sales are trending down at near a 20% annual pace. Consumers are being forced to drop discretionary purchases.


<ul>
<li>UK GDP bounced by 0.5% m-o-m in May amid broad-based activity growth. Postponing a bank holiday for the Jubilee may have briefly raised output as it did in 2002.</li>
<li>Activity trends still look broadly flat in 2022 with a worryingly high recession risk. The better May and supportive revisions mean the economy probably grew in Q2.</li>
<li>Given the bank holiday effect, the BoE will need to consider these data relative to the next release. Its August decision focuses more on the news about inflation persistence.</li>
</ul>


UK GDP bounced by 0.5% m-o-m in May amid broad-based activity growth. Postponing a bank holiday for the Jubilee may have briefly raised output as it did in 2002.
Activity trends still look broadly flat in 2022 with a worryingly high recession risk. The better May and supportive revisions mean the economy probably grew in Q2.
Given the bank holiday effect, the BoE will need to consider these data relative to the next release. Its August decision focuses more on the news about inflation persistence.


<ul>
<li>April’s surprise surge in retail sales was revised away, and yet May contracted for the ninth time in the past year. Hawkish hopes of retail resilience were built on sand.</li>
<li>High inflation is squeezing real incomes and consumption volumes as a natural progression of the pressures burning themselves out without hyperactive tightening.</li>
<li>Overdoing rate hikes risks recession, but the housing market canary seems alive and well. Less depressed supply is finding demand, consistent with house prices not falling.</li>
</ul>


April’s surprise surge in retail sales was revised away, and yet May contracted for the ninth time in the past year. Hawkish hopes of retail resilience were built on sand.
High inflation is squeezing real incomes and consumption volumes as a natural progression of the pressures burning themselves out without hyperactive tightening.
Overdoing rate hikes risks recession, but the housing market canary seems alive and well. Less depressed supply is finding demand, consistent with house prices not falling.


<ul>
<li>A shock spike in the UK unemployment rate broke its resilient trend. Less depressed labour force levels matter less than data about price-relevant gaps, like the UR.</li>
<li>The UR rise appears to be a genuine shift, despite the high demand for workers helping to drive higher wages. The wage trend appears comfortably above 4%.</li>
<li>The peak cyclical pressure in the UK labour market may have passed, with the UR trend turning and wage growth not rising as much. A burn-out phase may be starting.</li>
</ul>


A shock spike in the UK unemployment rate broke its resilient trend. Less depressed labour force levels matter less than data about price-relevant gaps, like the UR.
The UR rise appears to be a genuine shift, despite the high demand for workers helping to drive higher wages. The wage trend appears comfortably above 4%.
The peak cyclical pressure in the UK labour market may have passed, with the UR trend turning and wage growth not rising as much. A burn-out phase may be starting.


United Kingdom

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

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"V" For ? Thoughts on Central Banks

Market reactions to the ECB are clear, they are going the opposite way of what policy makers intended. As we prepare for the Fed, some medium term...

Shyam Devani

UK: Sales Down, Down, Deeper and Down

The British consumer continued suffering from painfully high inflation in June, with no significant real growth since Oct-21 creating an annual...

Phil Rush

UK: GDP Bounce With Bonus Working Day

Postponing a bank holiday for the Jubilee may have briefly raised UK output in May as it did in 2002. The BoE's August decision focuses more on the...

Phil Rush

UK: Retail Resilience Revealed as Mirage

Hawkish hopes of retail resilience were built on sand. High inflation keeps squeezing real incomes and sales. Overdoing rate hikes risks recession,...

Phil Rush

UK: Strain Shows as Labour Cycle Turns

The peak cyclical pressure in the UK labour market may have passed, with the UR trend turning and wage growth not rising as much. A burn-out phase...

Phil Rush

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