reports
- Peter Warburton
- Tom Traill
- Yvan Berthoux
Market Focus October
There are some things that money just can’t buy: time, love, immortality, the elixir of youth, immunity from prosecution, a universal and effective coronavirus vaccine and economic recovery. (Note the omission of the UEFA Champions League title.) Governments around the world (except on the European continent) are spending like frantic philanthropists, determined to make their mark and are largely indifferent to the wastefulness of their endeavours. One of the strongest arguments against active f...
- Peter Warburton
- Tom Traill
- Yvan Berthoux
Market Focus July/August 2020
A reticent consumer makes for a tentative retailer. Consumer-facing businesses in North America and Europe are staging the re-opening of their premises and keeping millions of workers on taxpayer-financed income replacement schemes. The furloughed masses are becoming less confident that they will be called back and hence more furtive in their spending behaviour. Like a nationwide game of ‘chicken’, businesses are daring the politicians to withdraw income support (at the risk of public revolt) an...
- Peter Warburton
- Tom Traill
- Yvan Berthoux
Global Inflation Heatmaps June/July
May saw another fall in aggregate inflation, but not by as much as April. Developed economies are in the midst of an uneasy exit from lockdowns, and the virus is becoming better understood. As economic activity revives, we anticipate significant price rebounds in the context of dislocated supply chains.
- Peter Warburton
- Tom Traill
- Yvan Berthoux
Market Focus June 2020
In 2019, doctors placed humans in suspended animation for the first time, in a trial designed to make it possible to fix traumatic injuries that would otherwise cause death. The technique is known as Emergency Preservation and Resuscitation (EPR). Over at the US Federal Reserve, they have been working on a similar procedure for the corporate credit market. aimed at stabilising the price of credits that would otherwise be in mortal danger. The success of both techniques entails a rapid cooling pr...
- Peter Warburton
- Tom Traill
- Yvan Berthoux
- Peter Warburton
- Tom Traill
- Yvan Berthoux
Global Inflation Perspective June 2020
Abstracting from the false dichotomy of deflation versus hyperinflation, the potential for the emergence of stagflation is severely underestimated. Near-term gyrations in the general price level should not distract from our inflationary destination. Radical policy manoeuvres have over-ridden central bank objectives and blown up the box.
- Peter Warburton
- Tom Traill
- Yvan Berthoux
Global Inflation Heatmaps May/June 2020
Inflation rates are falling rapidly the world over, but this does not fully represent the experience of the consumer. You cannot measure the price of what is not for sale. The nadir for global inflation is expected during the next 3 months. Fears of prolonged price deflation are overstated as a restarting economy will encounter supply bottlenecks.
- Peter Warburton
- Tom Traill
- Yvan Berthoux
Market Focus May 2020
Yield curve control in the JGB market is one thing; yield curve control in the US Treasury market is quite another. Non-residents own 13 per cent of the JGB market but 35 per cent of US Treasuries, and they sold a net US$300bn in March. The gigantic expenditures of the Federal government and the stupendous liquidity injections by the Federal Reserve have amplified inflation uncertainty and validated fears of a protracted slump in activity. Both factors are associated with a rise in the term prem...
- Peter Warburton
- Tom Traill
- Yvan Berthoux
Market Focus April 2020
Plunge protection“This is not the time to allow concerns about the size of the federal deficit to hinder the scale of response to combat Covid-19”. Words from Jay Powell that seem perfectly reasonable in today’s dire circumstances, but which will be extremely difficult to revoke even “when the (US) economy is well on the road to recovery”. Welcome to the age of fiscal dominance. Under the cover of plunge protection, a policy revolution is underway that will reorder priorities and programmes for ...
- Tom Traill
Global Inflation Heat Maps April/May 2020
The lockdown looms large The effects of the coronavirus shutdowns are material in the March data. The hit to consumer spending, with the exception of food and drink, is visible across the board. The collapse in the oil price and generalised absence of demand will continue to weigh on inflationary measures. However, beware the policy-induced inflationary backlash!
- Peter Warburton
- Tom Traill
GDP Heatmaps April 2020
Growth was already weakening before the virus Nominal GDP growth fell for the sixth consecutive quarter, shrugging off the year-long pivot to central bank easing. Coronavirus struck the global economy in its hour of weakness, sending activity and pricing tumbling towards the abyss. Despite policyinterventions of epic proportions, the foundations for a rapid recovery are lacking.
- Tom Traill
Global Inflation Heat Maps March/April 2020
The chill wind arrives The effects of the coronavirus are already visible in our inflation heatmaps. The sudden halt in the global economy and crash in the oil price will likely drive headline inflation sharply lower in the short term, but the supply side disruption, pent up demand, unprecedented stimuli and subsequent reorganisation of the economy argue for a backlash.
- Peter Warburton
- Tom Traill
- Yvan Berthoux
Market Focus March 2020
The enemy within“There is nothing fundamentally wrong with our economy. Quite the contrary, we are starting from a very strong position.” Sad to say, but Jay Powell just doesn’t get it. Covid-19 is merely the trigger event that has exposed the fragility and insecurity of the financial, economic and social systems of proud western democracies, not to mention emerging market kleptocracies. Coronavirus has merely accelerated our collective descent and brought forward the emergency responses that we...
- Peter Warburton
- Yvan Berthoux
Global Inflation Perspectives March 2020
US consumption is about to fold Growing uncertainty around Covid-19 has triggered panic buying of government and toilet paper alike. Consumer confidence surveys will soon reflect significant and lasting disruption to household incomes and tighter credit conditions, breaking the sequence of consumption growth and ushering in much lower nominal GDP growth.
- Peter Warburton
- Tom Traill
- Yvan Berthoux
Global Inflation Heat Maps February/March 2020
Global GDP-weighted inflation rose again in January to 3.5 per cent, up from 2.5 per cent in September. US inflation is 2.5 per cent, headline CPI in China is 5.4 per cent. In India it’s 7.6 per cent. 45 out of 53 countries in our sample have headline inflation higher than 3 months ago. Beware stale market narratives!
- Peter Warburton
- Tom Traill
- Yvan Berthoux
Market Focus February 2020
Transaction declined Central bankers have come to resemble snake oil salesmen and women, fervently promoting their latest potions and ointments to a sceptical public. While offers of cheap wholesale credit will almost always find ready takers on the fringes of the financial system, the business of pressing finance into the sweaty palms of the general public has attracted unwanted oversight and scrutiny. The retail response to last year’s easing campaign remains lacklustre outside a few EMs in C...
- Tom Traill
Global Inflation Heat Maps January/February 2020
Inflation bites back Global inflation surged in December, to 3.2 per cent, with notable increases in both core and food and energy components and diversified across US, Eurozone and India. Oil prices have fallen back after the early-January spike, but the arrival of the Coronavirus in China threatens to disrupt distribution and raise consumer inflation.
- Peter Warburton
- Tom Traill
- Yvan Berthoux
Market Focus January 2020
Currencies in play Dampened currency volatility and tight trading ranges can reflect settled expectations and confident fundamentals. Or, they can be expressions of nervous anticipation in the context of financial repression. If the latter, then we should look to much greater forex variability over the coming year as investors weigh specific risks and opportunities. If value is inching back into fashion, then cheap currencies (Japanese Yen, the Nordics, the Australian Dollar – and even the Euro...
- Peter Warburton
- Tom Traill
GDP heatmaps January 2020
Battening down the hatches The tide of global growth is clearly ebbing, a source of increasing concern. Apart from a technical rebound in the pace of nominal GDP growth in Japan, there was little cheer in the Q3 data as we head back to a 4 per cent world. Subsequently, inflation indicators have firmed due to food and energy prices, while real growth has dipped again.
- Tom Traill
Global Inflation Heat Maps Dec 2019/Jan 2020
Inflation is beginning to make its presence felt In November, global headline inflation jumped from 2.6 to 2.9 per cent. EM inflation hit 5.7 per cent as compared 1.4 per cent in DM. Chinese inflation made the largest contribution, jumping from 3.0 per cent to 4.5 per cent over the last two months. Indian inflation has also surged recently, mainly due to fresh food prices.
Unfortunately, this report is not available for the investor type or country you selected.
Report is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.