Eurozone economy solid in 2015, money signal still positive

Posts here in late 2014 and early 2015 argued for optimism about Eurozone economic prospects because monetary trends had strengthened significantly. Growth was solid in 2015 and domestically-generated inflation recovered. Monetary trends continue to give a reassuring message. Further monetary policy stimulus, therefore, does not appear to be warranted and – depending on the form […]

9 March 2016 by Simon Ward

Eurozone

Read More...

Money trends, global backdrop promising for EM

Narrow money growth in the E7 large emerging economies rose further in January, suggesting improving economic and equity market prospects. With January data available for six of the seven countries, the six-month change in real (i.e. consumer price-adjusted) narrow money* is estimated to have risen to more than 5%, or nearly 11% annualised, representing the […]

3 March 2016 by Simon Ward

Monetary Trends

Read More...

ECB reaction: Draghi overpromised

The ECB badly mishandled its communications strategy in the run-up to today’s meeting, with comments from President Draghi and leaks about 20 different easing measures being under consideration encouraging market expectations of much more aggressive action than the announced 10 basis point cut in the deposit rate and six-month extension of QE at an unchanged […]

6 December 2015 by Simon Ward

News

Read More...

UK money trends upbeat, corporate liquidity surging

Key UK money and credit measures continued to grow solidly in October, sending a positive message for economic prospects and supporting the case for an early rate rise. The Bank of England’s broad money measure, M4ex, rose by 0.4% in October, pushing annual growth up to 4.5%, the fastest since January – see first chart. […]

2 December 2015 by Simon Ward

News

Read More...

UK MPC money supply indifference risks policy mistake

Money supply analysis plays no role in policy formation under the current Monetary Policy Committee (MPC). Historically, policy-makers have run into trouble when they have ignored money and credit trends. Broad liquidity of households and non-financial firms is currently growing at the fastest rate since 2008. The velocity of circulation, meanwhile, has been stable in […]

18 October 2015 by Simon Ward

Economy

Read More...

UK broad liquidity accelerating, supporting rate rise case

Broad liquidity holdings of UK households and non-financial firms are growing at the fastest pace since the 2008-09 recession, supporting optimism about economic prospects and strengthening the case for an early interest rate rise. The Bank of England’s preferred broad money aggregate, M4 excluding money holdings of “intermediate other financial corporations” (M4ex), rose by an […]

2 October 2015 by Simon Ward

News

Read More...

UK GDP revisions to show stronger recovery

GDP revisions to be published by the Office for National Statistics (ONS) on 30 September will reveal significantly stronger growth in recent years, helping to explain the “productivity puzzle” and confirming that the double / triple dip scares of 2012 and 2013 were wide of the mark. The ONS has already indicated the scale of […]

23 September 2015 by Simon Ward

News

Read More...

Global monetary update: real narrow money flashing amber

Global real narrow money continued to slow in July, suggesting dimming prospects for economic growth next spring, allowing for the usual lead. Six-month growth of real (i.e. consumer price-adjusted) narrow money in the G7 and emerging E7 economies is back at its level in late 2014, having peaked in February – see first chart. While […]

5 September 2015 by Simon Ward

News

Read More...

US stocks cycle probably peaking

US inventories have risen to an elevated level relative to sales, suggesting that the 3-5 year Kitchin stockbuilding cycle is about to turn down. Together with slowing real narrow money expansion, this casts doubt on 2016 growth prospects. A post in August 2014 argued that US economic fluctuations can be explained by the interaction of […]

29 August 2015 by Simon Ward

News

Read More...

UK household finances: low saving as dangerous as high borrowing

UK household spending is as extended relative to income as in the late 1980s and mid 2000s, ahead of the 1990-91 and 2008-09 recessions. Those earlier episodes were associated with rapid and unsustainable credit growth; current spending excess, by contrast, is the mirror of record-low accumulation of financial assets. A normalisation of financial investment behaviour […]

26 August 2015 by Simon Ward

News

Read More...
1 2 3 36