• Does Fed admit that strong NFP won’t work anymore?

    US jobless rate, which has been staying below the NAIRU level for 2 years or more still cannot generate enough inflation to make Fed sure that its models are correct.

  • What happens to the Australian real estate market? Part 2.

    In the first part of my article “What happens to the Australian real estate market? Part 1” we established an unusual feature of the last episode of price deflation in the housing market — the absence of traditional drivers, such as high unemployment and a rise in mortgage rates. Housing prices in Australia declined despite of strong hiring rates (what leads to income growth and high consumer confidence) and stable mortgage rates.

  • Small-Cap Companies Object to New Tariffs

    The magnitude of decline in market cap is positively correlated with the size of a company, as shown by the recent returns of US indices such as S&P 600, Small Cap Index and Russel 2000.

  • What happens to the Australian housing market? Part 1.

    The monetary policy formula of any central bank, including the Bank of Australia, necessarily incorporates the indicators of the real estate market.

  • China’s “March momentum” wanes as underlying fundamentals remain extremely weak, April data show

    The German economy, the leading element in the EU’s welfare, found its footing in Q1, thanks to increased consumer spending and a recovery in construction. However, the EU’s government warned that the outlook for further expansion could be overshadowed by heightening trade tensions.

  • Low interest rates – a new harsh reality for global Central Banks?

    The painfully slow recovery and tepid to the efforts of Central Bank inflation can become a plague for developed economies, if policymakers won’t find a natural extension of stimulus measures when interest rates reach their lower limit.

  • The era after QE: How will the Fed fight the next recession?

    Massive inflation of world central banks’ balance sheet during last recession and only slight and cautious unwind during expansion phase (see “ratchet effect”) raises the question of QE flexibility as a policy tool for smoothing economic cycles.

  • Key economic events and reports of the upcoming week

    Tuesday, May 14, 2019 – Average Earnings Index +Bonus (Mar)(GBP), Claimant Count Change (Apr)(GBP), German ZEW Economic Sentiment (May)(EUR).

  • As US hikes tariffs, China still hopes that both sides can come into agreement

    China will take measures in response to the US decision to additionally tax imports from China in the amount of $200 billion. This is stated in the message of the Ministry of Commerce of China.

  • British hard data has barely helped Pound to defend 1.30 level

    The “one-off action” of British manufacturing sector to support the economy took place in the first quarter, showed data on Friday. Firms have accelerated the shipment of finished products, expecting that after Brexit conditions for this will be less favourable. The data helped the pound to defend the level of 1.30, however, the call to increase longs on British currency was quite low-key.

  • China PPI and CPI lack natural catalysts as the trade data post muted action

    The April PPI in China accelerated to the quickest pace in four months, signaling an increase in production volumes, which spurred demand for raw materials.

  • Why the US and China will start negotiations from scratch

    The diplomatic cable sent from Beijing to Washington last Friday consisted of a total overhaul of a 150-page document that could form the basis of the agreement between the countries, sources from the government and private sector, familiar with negotiations, told Reuters.

  • Can the Yuan become a global reserve currency?

    The news from South China Morning Post posted on May 4 claim that Chinese banks have quietly reduced the quota for yuan-to-dollar exchange from $5,000 to $3,000.

  • Trade talks progress was no more than… House of Cards

    Safe heavens advanced while risk appetite was dampened at the start of the week after Trump opened a new chapter in the tariff war on Sunday. The US president said he would like to introduce tariffs for 200 billion dollars of Chinese goods this week and promised to plague bilateral trade with more barriers soon.

  • Is the Fed losing control over interest rates?

    The main storyline in the Fed policy, as expected, has not undergone any significant adjustments, as both the statement and tone of Powell speech were neutral.