BoAML | With an abundance of stories about how things can go wrong for the US economy, we are often asked to lay out a scenario in which the data surprise to the upside. In our view, the burden rests on the labor market. If there is an increase in demand for labor, which is met by a gain in supply, we could settle on a stronger trend in job growth.
James Alexander via Historinhas | It’s taken a while but the evidence is now in. Euro Area NGDP growth has overtaken US NGDP growth. Congratulations to the ECB, commiserations to the Fed. Go Europe!
J.L. M. Campuzano (Spanish Banking Association) | Low growth, huge inequality and the slow progress with structural reforms: these are the three problems which cause the most concern for IMF Managing Director Christine Lagarde. And the issues which she would like tackled at a global level in a forum like last week’s G20 meeting.
*Foto: Steven Cutts
Spain’s socialist party PSOE doesn’t seem to be too worried about the fact the country may not have a 2017 Budget. But it’s increasingly clear to all of us that the lack of a budget will not be without a cost. On the contrary, it will greatly affect a large part of Spanish society. Almost all economists believe that the impossibility of drawing up new accounts, and updating certain items, could mean that the amount spent on civil servants’ salaries will be maintained.
There are a lot of indicators which basically show that the US economy is strong, but it’s a “weak” strength, since it has been unable to maintain average growth of 2%. A weakness I see in the US economy is investment: in the second quarter it declined, which is not a sign of strength.
The IEA estimates that the drop in production in non-OPEC countries, mainly the US, coupled with the positive trend in demand, could foreseeably shut off the excess of supply in the second hald of 2016, returning stability to the oil market.
The trend in the variables observed indicates that the recovery of the Spanish economy continued during the first half of 2016. With nearly 80% of the information available for 2Q16, the MICABBVA model estimates that quarterly GDP growth (QoQ) will have completed one year at around 0.8%. If confirmed, this stabilisation in the pace of expansion would give an upward bias to the growth envisaged in BBVA-Research’s baseline scenario for 2016 (2.7%).
AXA IM | Is the future for fixed income one of flat and negative yield curves? That is certainly the direction of travel as central bank buying, lowered growth and inflation expectations and a lower for longer interest rate outlook all contribute to reduced term premium and hoarding of safe haven assets.