Political Analyst, Heteronomics

Alastair Newton

Political Analyst

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>Whatever Rachel Reeves comes up with in her 26 November budget, she is bound to run into criticism from within her own parliamentary party.</li><li>Bond markets seem set to react badly to this, especially if it seems likely that her overall objectives will be undermined by internal resistance to proposed measures.</li><li>She and the PM will probably survive this, but a market-unsettling change and slide to the left look increasingly likely by mid-2026, followed by defeat at the next election.</li></ul>

Whatever Rachel Reeves comes up with in her 26 November budget, she is bound to run into criticism from within her own parliamentary party.Bond markets seem set to react badly to this, especially if it seems likely that her overall objectives will be undermined by internal resistance to proposed measures.She and the PM will probably survive this, but a market-unsettling change and slide to the left look increasingly likely by mid-2026, followed by defeat at the next election.

<ul><li>Most analysis of Opec+’s 2 November decision is as overly simplistic as the cartel’s public justifications. Calling an unwinding ‘time out’ in 2026Q1 is by no means unwise.</li><li>Most notably — and despite continuing economic and political uncertainty — it is very likely that the market will be awash with oil in any case for some months to come.</li><li>In other words, the cartel may already have done enough to achieve its primary objective, i.e. clawing back market share at the expense of US shale producers.</li></ul>

Most analysis of Opec+’s 2 November decision is as overly simplistic as the cartel’s public justifications. Calling an unwinding ‘time out’ in 2026Q1 is by no means unwise.Most notably — and despite continuing economic and political uncertainty — it is very likely that the market will be awash with oil in any case for some months to come.In other words, the cartel may already have done enough to achieve its primary objective, i.e. clawing back market share at the expense of US shale producers.

<ul><li>Donald Trump and Xi Jinping’s 30 October summit will likely stave off, for now, any further escalation of trade tensions between China and the US.</li><li>However, thanks to its monopoly on strategic minerals and Xi Jinping’s willingness to play a long game — even beyond ‘mere’ trade — China holds the stronger hand.</li><li>Irrespective of whatever Mr Trump concedes this week to secure a ‘headline grabber’, Xi Jinping will therefore come back for more, not least on Taiwan.</li></ul>

Donald Trump and Xi Jinping’s 30 October summit will likely stave off, for now, any further escalation of trade tensions between China and the US.However, thanks to its monopoly on strategic minerals and Xi Jinping’s willingness to play a long game — even beyond ‘mere’ trade — China holds the stronger hand.Irrespective of whatever Mr Trump concedes this week to secure a ‘headline grabber’, Xi Jinping will therefore come back for more, not least on Taiwan.

<ul><li>The Democrats opted for a US government shutdown despite the Administration being well prepared for what it sees as an opportunity to promote its longer-term agenda.</li><li>While they hold out, the president’s ‘grim reaper’, OMB Director Russell Vought, will have a free hand to cut the size of government and pursue his unitary executive vision.</li><li>Some of his actions will undoubtedly be challenged in the courts, but the signs are that the Supreme Court will continue to side firmly with the Administration.</li></ul>

The Democrats opted for a US government shutdown despite the Administration being well prepared for what it sees as an opportunity to promote its longer-term agenda.While they hold out, the president’s ‘grim reaper’, OMB Director Russell Vought, will have a free hand to cut the size of government and pursue his unitary executive vision.Some of his actions will undoubtedly be challenged in the courts, but the signs are that the Supreme Court will continue to side firmly with the Administration.

<ul><li>European policymakers and investors see Donald Trump’s economic policies harming Republican prospects in the 2026 midterms and the 2028 general election.</li><li>The Trump Administration is placing a good deal of faith in AI as a panacea. But the US may not have the skilled labour or the power-generating capacity to fuel an AI boom.</li><li>Nor is it clear whether the current Administration is preparing for the related socio-economic disruption from which the MAGA faithful would be far from immune.</li></ul>

European policymakers and investors see Donald Trump’s economic policies harming Republican prospects in the 2026 midterms and the 2028 general election.The Trump Administration is placing a good deal of faith in AI as a panacea. But the US may not have the skilled labour or the power-generating capacity to fuel an AI boom.Nor is it clear whether the current Administration is preparing for the related socio-economic disruption from which the MAGA faithful would be far from immune.

Alastair was Senior Political Analyst at Nomura International plc between October 2008 and July 2015,
having first joined Lehman Brothers International in that capacity in August 2005. As such, he was responsible for identifying, tracking, analysing and illuminating to investors political events worldwide likely to impact on financial markets. In addition to his signature periodical Issues Which Keep Me Awake At Night on political and geopolitical risk, he was the co-author of major studies on China, India, Indonesia, North Korea, Iran/Israel and on geopolitical risks related to the shift of the global economic centre of gravity back towards Asia, as well as numerous shorter papers.