UK Leadership, European Deficits and the US Inflation Test

Matt Jones is joined by Neil Staines to discuss the key macroeconomic and market themes facing professional investors in the week ahead.In the UK, attention turns to the Parliamentary Labour Party’s leadership nomination deadline and the policy direction of the next administration. Neil considers the commitment to the existing fiscal rules, the fragile backdrop for output, employment and productivity, and the latest GDP, trade and industrial production data. He also examines the prospect of a more dovish Bank of England during the second half of the year and the importance of maintaining credibility in the gilt market.Across Europe, the discussion covers the court ruling on Marine Le Pen’s eligibility to contest the next French presidential election, persistent deficit pressures and the requirement for greater defence spending. With the ECB entering its blackout period, markets will also assess the revised eurozone inflation figures and the potential path of interest rates.Further afield, the focus shifts to China’s second-quarter GDP and June activity data, a potential 25-basis-point rate increase in South Korea, international trade releases and TSMC’s latest earnings.In the US, geopolitical developments involving Iran, Russia and Ukraine remain important for energy prices and inflation. A major run of economic releases—including CPI, PPI, retail sales, housing and sentiment data—will help shape expectations for Federal Reserve policy. Fed Chair Kevin Warsh’s congressional testimony and the opening of the second-quarter earnings season will provide further direction for markets.Chapters00:00 Welcome and introduction00:29 UK politics, economic data and the Bank of England02:08 European deficits, China data and the global outlook03:49 US geopolitics, inflation and Federal Reserve policy05:54 The weekend sports radar06:55 Neil’s long and short picks07:12 Closing remarks and disclosuresThis podcast is intended for professional investors only. Information, data and views were accurate at the time of recording.The opinions expressed in this podcast are those of the presenters and do not necessarily reflect the views of Eurizon SLJ Capital, Eurizon Capital, or the Intesa Sanpaolo Group. The information and opinions shared are intended solely for professional investors and should not be relied upon by other investors. Please note that the information provided in this recording is for informational purposes only and is not intended to be complete or constitute an offer to buy or sell securities or any derivatives. It has not been prepared in accordance with legal and regulatory requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. It does not constitute research on investment matters and should not be construed as containing any recommendation, advice or suggestion, implicit or explicit, for any investment strategy or financial instruments, the issuers of any financial instruments, or a solicitation, offer or financial promotion relating to any securities or investments. ESLJ and its affiliates do not assume any liability whatsoever for the contents of this podcast and do not make any representation or warranty as to the accuracy or completeness of any information contained in this communication.