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inflation

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World economy 7th January 2014

Interest rate moves are out of sync with inflation, what next?

LONDON | By Michael Gavin at Barclays | The 2013 sell-off in interest rates in the global currency areas has been driven entirely by perceptions that economic activity is on course to continue its recovery; inflationary pressures have been conspicuous only for their absence in all major currency areas except Japan, where the (still limited) pressure is welcome. This likely explains why equity markets in the advanced economies were so resilient to the backup in US and global rates and why the brunt of the 2013 bond sell-off was borne largely by the long end of the curve.

FED Higher inflation target

World economy 21st November 2013

Higher inflation target: A communication issue

LONDON | By Michael Pond and Chirag Mirani at Barclays | Some at the Fed believe that a higher inflation target could be a good strategy, though one that is difficult to communicate. Instead, in our view, it has an implicit near-term tolerance for above-target inflation; forward breakevens should be higher as a result.

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In Europe 13th November 2013

Spanish and Italian inflation wrap-up: Services and food driving inflation down

LONDON | By Barclays analysts | Taking into account today’s downward revision in Spanish HICP, we now revise our October French HICP forecast from -0.2% m/m (0.6% y/y) to -0.1% m/m (0.7% y/y). The Italian final October HICP inflation rate was revised up by 9bps to 0.76% y/y. We note that historical subcomponents indices have been revised since the beginning of the year (although not the headline index). This nonetheless does not alter our view that euro area HICP inflation rate should come in unchanged at 0.7% y/y. If anything, we see slight downside risk to our 116.99 HICP ex tobacco projection.

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In Europe 4th November 2013

Before ECB’s meeting: Euro Losses Momentum To Possible Rate Cut

MADRID | By Francisco López | The market has changed their perception about the ECB’s monetary policy and it’s now anticipating a possible reduction of interest rates in the eurozone before end of the year or early 2014. The first consequence has been the depreciation of the euro, which has gone from 1.38 dollars, a two-year-maximum, to 1.35. The European currency suddenly depreciated, yet it still overvalued against the dollar.

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Spanish economy 11th October 2013

Spanish CPI plummets to 45-month low

MADRID | By Tania Suárez | The Spanish consumer prices index (CPI) dropped to +0.3% from August to September, its lowest level in 45 months, due to the statistical effect of the increase in VAT of the same month of 2012.

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Markets 10th October 2013

Janet Yellen is ‘branded’

SAO PAULO | By Marcus Nunes | We know that over the next 10 years things only got worse and only got better when Volcker decided that to “live with inflation” was not a good deal. And things really improved when the Fed managed to keep the economy tracking a stable nominal trend level path.

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Markets 1st October 2013

China growing hungry

Iris Mir | During the last decade China’s food  imports grew by 21% a year.  The country is running out of arable land where to farm basic food like grains and cereals or where to grow its cattle. So it’s going abroad to acquire millions of hectares of land from other countries.