Yield Curves Flattening Everywhere: Global Growth to Slow

As we remind our readers often, yield curves are one of the single best leading indicators.  A yield curve inversion has predicted every US recession since 1945, with only one false positive, in 1966 (although the false positive preceded a…


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Growing number of lower paid workers in US

The participation rate in the US has declined much less for those at lower levels of education: Source: Macrobond That the lower educated are disproportionately supporting employment growth, through lower paid jobs, may help explain why, so far, we have…


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Eurozone Deposits Growing Again

The ECB’s loan demand surveys (which lead by about 12 months) have been suggesting higher credit growth ahead for some time (top chart) and there are signs that this may finally be occurring.  The bottom chart shows that overall eurozone…


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Emerging Market Valuations Will be Compelling

A weak oil price and a strong dollar rally will put pressure on emerging markets, but valuations for many emerging markets should soon be compelling.  Emerging markets have been in a downtrend relative to the S&P since 2010.  We will…


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Top Ten Posts of 2014

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As we head in to 2015, here are the top ten posts from 2014. We wish our readers a Happy New Year! Top 10 Posts of 2014: Profit Margins To Head Lower, Equities To Suffer (May 22nd) Deflation Not A…


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Japanese Equity Flows Diverge

October saw the BoJ’s announcement of increased stimulus, coordinated with the new targets for the GPIF, 25% each for foreign and domestic equities (up from 12% each), and a decrease in JGBs, from 60% to 35% of holdings.  Investors, both…


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UK Credit and Money Growth at Extremes

Easy monetary policy in the UK is looking ever more inappropriate.  Divisia money is a weighted money-supply measure.  Higher forms of money, eg notes and coins have greater weights than less liquid forms of money, such as building society deposits. …


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Higher Rents in the US are a Strong Support for CPI

Despite the subdued nature of US CPI, some large components are turning up.  Owners’ equivalent rent and rent of primary residence, which together account almost of a third of the CPI basket, are turning up strongly.  A low vacancy rate…


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BOJ Putting Pressure on Other Asian Central Banks

Further yen weakness, in an environment of slowing global growth, will put pressure on other central banks to ease policy.  Although attention is rightly focused on the ECB, Japan’s biggest trade partners, who derive significant parts of GDP from trade…


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Swiss Gold Referendum: A Spanner in the Works

As polls continue to swing around ahead of the Swiss gold referendum on 30th November, we expect increased volatility in the FX and gold market.  After the implementation of the EURCHF floor, gold’s share of the SNB balance sheet has…


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