Here are ten things that I think will shape the global and Australian economies in 2018, and that expect I’ll be talking about at conferences and events over the course of the coming year. Show More
deflation
Capitalism works because companies are free to enter and leave businesses. Labour is also free to move from one activity to another. Returns on capital, human and physical, are then mean reverting in that more competition and capital enter attractive businesses and vice versa. The modern version involves government regulation... Show More
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I consider the oil price to be the single most import chart to watch today. OPEC oil producers still appear committed to the production agreement but US oil producers are adding to global supplies and keeping downward pressure on prices. The chart is telling me that oil prices looked to... Show More
Aussie market got hammered on US sentiment and finished slightly higher than the low of the day after a big mid-day bounce to almost flat territory was killed off by weak wages growth data. Volatility was clear to see and the investors were not sure which way to go. Global... Show More
Central bank currency wars, political election cycles and a corporate survival mode will continue to put downward pressure on growth rates and interest rates. The RBA has been pushed into an interest rate easing cycle as deflation worries starts to bite. The global growth worries, weak US data and weak... Show More
Unlike in the economic theories followed by central bankers, deflation is actually a good thing. Show More
The Reserve Bank has cut the cash rate to a new historic low of 1.75% - its first move in 12months. Board members noted that "inflationary pressures are lower than expected." MORE MARKET NEWS AT https://www.commsec.com.au/market-news/the-markets.html Show More
Central banks want prices to rise consistently and with low volatility, normally in a range of 2 to 3% per annum. Prices growing at greater than 3% per annum apparently signal capacity constraints in an economy, so the central bank raises interest rates to crimp consumer spending and investment -... Show More
There’s a strong chance the Reserve Bank could cut the cash rate on Tuesday to a record low 1.75% following the release of weaker than expected March quarter inflation Show More
Mark Burgess the former CEO of Australia’s Future Fund shares his assessment on the recent sell off in risk assets. Specifically he believes markets are flagging the prospect of a deflationary recession – a scenario foreign to many investors. “What happens when you are dealing with deflation and excess supply,... Show More
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Aussie market flip flopped between China stimulus, NZ deflation worry and falling local consumer sentiment before Chinese market selloff and falling US market futures really took the market down south. The worry about US market was clear to see today as the selling came in hard in the last few... Show More
Vimal Gor, Head of Income & Fixed Interest, says the global economy will face deflationary pressures for at least another two years and a strong USD may force the Fed to unwind rate hikes by 2017. "Everyone is looking for the base effects of inflation to pick up quite markedly... Show More
At a recent investment forum Vimal Gor, Head of Income & Fixed Interest at BT Investment Management highlighted what he sees as the three deflationary drivers behind recent market moves. Strength of the USD is slowing the US more than it is pushing growth to the rest of the world.... Show More
It's been a tough few days for precious metal investors, with gold easing back toward USD $1170oz. The major damage was done earlier in the week, when high hopes of a resolution for a deal in Greece led to a sell-off, and the market hasn't gotten it's mojo back, with... Show More
Monetary Tectonics is a phrase used by t Incrementum AG, based in Vienna, Austria, to explain the 'war' between inflationary and deflationary forces influencing the global economy and markets. Show More
Bloomberg reports “It has been a busy period in markets across the globe, with trends (and trades) breaking down everywhere.” 1) the USD is weakening. 2) Euro sovereign debt is plunging, causing yields to rise. 3) “Asian stocks, which have been in a bull market for years, have been feeling... Show More
Next week is crunch time for the USDJPY. On Wednesday the US FOMC updates its assessment of monetary policy, and on Thrusday the Bank of Japan (BOJ) releases updated economic forecasts. Either event on its own could cause the USDJPY to break out of its sideways pattern. Max McKegg, managing... Show More
Gavyn Davies, formerly Head of Global Economics at Goldman Sachs and now blogger at the FT says “Assuming that the oil price is now tracing out a bottoming pattern, as US fracking output is rapidly reduced and oil demand begins to rise, the global deflationary shock is over, for now... Show More
Chart: European annual inflation hits lowest level since July 2009. This chart via Morgan Stanley highlights just how striking the inflation conundrum facing Europe is right now. Euro Area Annual Inflation was - 0.6% in January - the Lowest Rate Recorded Since July 2009. Show More
9 charts looking at some significant economic from last week. Three that stand out to me were 1) India's economy slipping into deflation (more here: http://goo.gl/GpHIwF) 2) The Japanese economy looks to have broken out of recession 3) The lower Yen continues to fuel a trend in export growth for... Show More
