Macro: US-ASEAN Summit Shows The Limits Of US Outreach To Region and more

In today’s briefing:

US-ASEAN Summit Shows The Limits Of US Outreach To Region

The substance of the US-ASEAN summit fell short of what was needed to strengthen America’s capacity to offset China’s growing influence in ASEAN.
The small scale of US offerings to ASEAN relative to China likely confirmed in many ASEAN leaders’ minds that the US is structurally unable to match China economically.
Domestic politics makes it virtually impossible for the Biden Administration to get any kind of free trade agreement giving ASEAN wider market access through Congress.

UK inflation broke its six-month streak of upside surprises by “only” jumping to 9% on the CPI and 11.1% on the RPI. Food prices were surprisingly high for us.
Underlying inflation measures failed to keep pace with the headline change this month but remain far above levels consistent with the inflation target in the medium term.
Household energy bills remain a critical differentiator between forecasts. Inflation may not live up to the BoE’s cautiously extreme forecast yet not block near-term hikes.

EA HICP inflation was revised slightly lower again in the final print for Apr-22, so it is flat on the month at 7.44%. The ex-tobacco index still rounded to 7.6%.
We expect the headline rate to rise further, although the peak looks relatively flat around the current painfully elevated levels for several months.
The outlook is supported through the medium-term by price levels converging with their equilibrium. We extend this approach across the EA19, lifting our forecast further.

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