Positive Eurozone money signals vindicated and are still positive

Posts here from the summer onwards argued that faster Eurozone monetary growth, particularly of the narrow M1 measure, was signalling notably better economic performance in early 2015. The monetary signal was starkly at odds with consensus gloom, including recession warnings … Read More

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UK inflation drop due to commodities / sterling

The annual change in consumer prices fell to zero in February, prompting media headlines about “record low” inflation. A more correct statement is that CPI inflation is at a 25-year low, since official statistics do not extend back before 1989. … Read More

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UK equity / cash yield gap still wide

The gap between the dividend yield on UK equities and the interest rate on a competitive bank / building society savings account remains historically high, even taking into account the Budget decision to exempt small savers from tax on interest … Read More

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UK Budget: politics trumps economics

The Chancellor had less fiscal room for manoeuvre than some had expected, so needed to raise extra revenue to finance modest giveaways. His key announcements have a clear political rationale but lack economic logic. The fiscal plans continue to rest … Read More

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Eurozone real yields more negative than US in 2012

The real yield on intermediate-maturity government bonds in the Eurozone has moved beneath the minimum level reached in the US in 2012, ahead of a significant market sell-off. The real yield is defined here as the average redemption yield on … Read More

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Is US dollar strength draining global liquidity?

The global real narrow and broad money measures followed here continue to grow solidly, suggesting a favourable economic outlook. Some commentators, however, argue that US dollar strength is tightening global liquidity conditions, warranting a bearish view of economies and markets. … Read More

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Global leading indicator still positive

The OECD this week released January country leading indicator data, allowing an update of the derived global* leading indicator tracked here. This moved sideways in January following a solid December gain, suggesting that the recent upswing in global industrial output … Read More

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US money trends signalling H2 growth rebound

A post in September noted that US narrow money growth had fallen sharply and was signalling a loss of economic momentum in early 2015, allowing for the usual lag. US economic news has mostly disappointed recently, reflected in a significant … Read More

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G7 “core” inflation stable, close to 10-year average

G7 annual consumer price inflation fell to 0.2% in January, the lowest since October 2009, but the “core” rate excluding food and energy was unchanged at 1.6% – see first chart. Stable core inflation suggests that deflation worries are overblown. … Read More

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UK money trends still positive, pensioner bonds affecting data

UK monetary trends remain consistent with solid economic growth. Broad money was held back in January by a transfer of funds out of bank deposits into the new National Savings pensioner bonds. Narrow money was less affected by this shift … Read More

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