José Ramón Díez (Caixabank Research) | The global economic scenario continues to face the effects of a triple shock on global supply (bottlenecks, war and zero-COVID policy) which is keeping commodity prices strained, continues to erode confidence among economic agents and has sent alarm bells ringing in the financial markets, with increased volatility and sharp price corrections. In spite of all the above and the scarcity of information published for…
Growth has made a comeback but each country already wants to take its own path. As explained by Philippe Waechter, Chief Economist of Ostrum AM, “unity is no longer on the cards and the world economy is fast going down a very different road”.
The economic world is deeply divided over whether or not we are facing a new recession. And some people are putting forward sufficiently solid arguments which easily eliminate any doubts on the subject. Although there is data to support the doubts existing in both the US and Europe, it’s also true that there are solid economic fundamentals which defend the thesis that a recession doesn’t seem to be imminent.
MADRID | The Corner | A bull market. But how sustainable? Asia ex Japan has just breached its 2011 high. Key to this is China. Over the last month MSCI China is up 7% on strong volume. It is now up 5% for the year. Easier monetary conditions, better growth data and improved earnings, meeting low valuations and poor sentiment, have driven the China rally and recent outperformance.
SINGAPORE/LONDON | By UBS analysts | Global growth has disappointed in the first half of this year. As a result, we have steadily marked down our forecasts for 2014. We now forecast global growth of 3.0% in 2014 and 3.3% in 2015 after 2.5% in 2013. At the turn of the year we forecasted 3.4% global growth for 2014 and 2015.
SAO PAULO | By Marcus Nunes | According to Lars Christensen, central bankers around the world talk about monetary policy as being “unconventional” when they undertake “quantitative easing” to expand the money base. This term frustrates me a great deal as there is nothing unconventional about the fact that the central bank is changing the money base.
MADRID | By Luis Arroyo | Some people consider the external surplus of southern countries in the EU as the ultimate proof that the austerity process was a success. But they are wrong. The reality is that everybody is increasingly saving more money –even wealthy people… but nobody is consuming.
SAO PAULO | By Marcus Nunes | One thing MMs have been saying for a long time is “stop talking about inflation”. But everyone else insists on doing so and now they are trapped.
LONDON | By Barclays analysts | EM markets are likely to enjoy supportive conditions over the next few weeks. The resolution of the US government shutdown, expectations of QE tapering pushed further into 2014, the emergence of some EM re-coupling to stronger global manufacturing and still-attractive EM valuations should all be helpful factors. Liquidity considerations are likely to become a less important market driver, and higher-yielding EM assets, particularly in EM credit, should attract further support where bottom-up fundamentals allow.
LONDON | By Barclays analysts | Investor expectations have been slow to incorporate the improvement in global business confidence, and the persistent pessimism presents an opportunity to be long assets that will benefit from an acceleration in global growth.