Three months after the U.K.’s historic vote to leave the EU, we’re beginning to see hard evidence about Brexit’s immediate impact on growth in Britain and the European Monetary Union. In short, the sky hasn’t fallen on either side of the Channel, contrary to concerns that the U.K. would soon… Read More »
A ‘no’ vote in the constitutional referendum on 4 December could result in Prime Minister Matteo Renzi’s departure On 26 September, Italian Prime Minister Matteo Renzi announced that the referendum on the constitutional reform will take place on 4 December. If successful, the proposed reform would reduce the role of… Read More »
A US rate increase looks likely in December, barring an election shock. As had been widely expected, the US Federal Reserve (Fed) left interest rates unchanged at Wednesday’s meeting. However, the US central bank is paving the way for a rate rise in December. In the accompanying statement they said… Read More »
The Bank of Japan (BoJ) did not cut rates but did introduce two new policy measures at today’s meeting. The first is “QQE (quantitative and qualitative easing) with yield curve control” which essentially means directing asset purchases so as to keep 10-year government bond yields close to zero. When combined… Read More »
“A Quantitative Easing (QE) programme, as decided by a central bank, is a plan that consists of buying large quantities of assets whatever the price is. As a consequence, prices lose their precious information content that normally enables investors to switch meaningfully between different asset classes”, says Yves Longchamp, Head… Read More »
The drama that erupted in June when UK voters chose to leave the European Union has since morphed into a domestic British situation. Market and sentiment channels have transmitted little or no Brexit-shock into the real economy elsewhere in the world, and recent economic data indicate that mainland Europe, the… Read More »
Yves Longchamp -
One of the main differences between free market and communist economies is the role of prices. In free market economies, prices play a central role as they aggregate valuable information over demand and supply in a single figure that guides economic agents – producers and consumers – to make their… Read More »
The Fed’s view that the economic case for a rate rise is strengthening might lead some investors to believe that the nightmare of low growth and low yields is ending. Their optimism is probably unfounded. A downbeat update from the Congressional Budget Office (CBO), confirms that recovery in developed markets… Read More »
State Street Global Exchange released the results of the State Street Investor Confidence Index® (ICI) for August 2016. The Global ICI decreased to 89.7, down 8.3 points from July’s revised reading of 98.0. The decline in sentiment was driven by a decrease in the North American ICI from 99.8 to… Read More »
Tomorrow, the Markit UK PMI for August will be released and data is expected to come in higher than the July release. Yet the indicator should again remain below 50 for the second consecutive month. Although having been on tenterhooks since the Brexit vote, UK data has surprised in recent… Read More »
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