Could China be Europe’s white knight?
Macro Thoughts’ end of 2017 review warned the slowdown, that had been evident in Asia in Q4, would inevitably spread into Europe in Q1. At the time, this was a non-consensus call, and many commentators started to expect the end of the ECB’s loose monetary policy to end early. The slowdown in Q1 has been a surprise to many, some considering transitory factors; however, the deceleration will again highlight underlying structural problems that monetary policies cannot solve.
Europe will face similar challenges, but the recent strength of the Euro has created added challenges and, therefore, the short-term correction may be greater than markets expect...China has cut its RRR rate for banks by 1%, which will have needed Xi Jinping’s authority, highlighting growing headwinds. The direct correlation of China’s economy with Europe....
‘If European growth slows and demand for CEE goods drops, the high level of both government and consumer debt could run into funding difficulties, and an implosion of CEE will have a widespread and extended impact, both economically and geopolitically, that could even see the CEE block do a U-turn, moving away from Europe and towards Russia, taking their EU grants with them’, Macro Thoughts, January 12, 2018.
www.macrothoughts.co.uk
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Globally recognised for strong analytical skills, aligned with a particular aptitude for anticipating global economic events ahead of the majority of commentators, Macro Thoughts’ independent fundamental economic research and analysis and resultant strategies have a track record that assures exceptional results, with a service that surpasses the model of bank-supplied, partisan research and stands out from the general contributions on platforms that your clients and peers already have access to. The support and value offered by Macro Thoughts, delivering written research and analysis, presentations and consulting services, is backed by decades of macroeconomic and market experience and can be tailored to your specific requirements.
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www.macrothoughts.co.uk
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