Global leading indicator still signalling strength

The global longer leading indicator* followed here rose in July, supporting optimism about near-term economic prospects. The leading indicator fell between June and December 2013, correctly signalling an economic slowdown during the first half of 2014. Six-month industrial output expansion … Read More

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US narrow money suggesting early 2015 economic slowdown

US narrow money rose strongly during the first half of 2014 but slowed in July and probably contracted last month, judging from weekly data through 25 August. Barring a strong September rebound, this suggests that the economy will lose momentum … Read More

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UK 2008-09 recession no worse than 1979-82

The UK 2008-09 recession may no longer warrant the label “great”. GDP is now estimated to have declined by 6.0% over five quarters in 2008-09 versus 7.2% over six quarters previously. The Office for National Statistics (ONS) has repeatedly claimed … Read More

Posted in UK economy, UK politics | 1 Comment

Global money trends still positive but losing momentum

Global economic growth should firm further near-term but is likely to moderate again in late 2014 / early 2015, judging from July money supply data. The forecasting approach here focuses on the six-month rate of change of global real narrow … Read More

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UK monetary backdrop still expansionary

UK narrow money growth slowed in July while broad money growth was little changed: monetary trends, overall, appear consistent with continued solid economic expansion through early 2015. The preferred narrow and broad aggregates here are M1 and M4 excluding financial … Read More

Posted in Monetary Trends | Leave a comment

Eurozone money numbers better, early QE unlikely

Eurozone monetary trends strengthened further in July, suggesting that recent ECB policy easing is bearing fruit and will lead to an economic revival later in 2014, barring external “shocks”. Six-month growth of real (i.e. inflation-adjusted) narrow money M1 has risen … Read More

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US stock market rise stretched relative to history – update

This post updates a comparison of the rise in the Dow Jones Industrials index from its March 2009 low with increases after six previous bear markets involving a peak-to-trough fall of about 50%. (The Dow declined by 54% between October 2007 and … Read More

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UK MPC minutes suggest increased interest in money trends

An interesting feature of the August MPC minutes is that the “Money, credit, demand and output” section includes, for once, a discussion of monetary trends. This may reflect the influence of the Bank of England’s new chief economist, Andrew Haldane. … Read More

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Japanese QE still isn’t working

Japanese monetary trends continue to suggest remarkably little impact from the country’s QE experiment. Annual growth of broad money M3 stood at 2.1% when the Bank of Japan (BoJ) launched QE in October 2010; it was 2.5% in March 2013, … Read More

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UK Inflation Report confirms hawkish shift since May

Markets have interpreted the August Inflation Report as signalling further delay in monetary policy normalisation. Bank of England Governor Mark Carney’s press conference remarks admittedly gave little encouragement to those expecting the first rise in Bank rate to occur this … Read More

Posted in Inflation | 2 Comments
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