The economy faces a very closed curve: the end of the cycle?



[ad_1]

Three months ago, the ECB stopped buying bonds. At the beginning of March, Mario Draghi declined sharply, reduced forecasts of growth and inflation, lifted all price increases, and again opened long-term delays to banks. Did you see this drought as a result of the activity? Since the reading of the German PMI report and the observation of the yields of the ten-year bundles again fell below zero (as it has not happened since 2016). Back to the future? Industrial production in the euro area has fallen to its lowest level in the last 71 months. With the support of services, the economy is still on the rise, approx. 0.2%; There were no signs of improvement in March. Did Draghi fall asleep at the forefront? If this gets worse and not much, the European recession will be a reality (if not yet).

What about Powell Fed, who in October warned of overheating and willingness to go beyond the threshold of neutrality; and that he made a steady and sharp increase in December? It is known that the Fed did not wait until 2018 to recalculate, and changed its discourse – "forward" – to the tile. He was able to stop the destruction of capital markets and encourage the violent gathering that he took out of distress. The share of shares rose by almost 12% this year, but they did not follow the 10-year rates, but fell by a quarter. They are 2.44%, below the "upper limit" – 2.50% – the volume of found funds (at 24 hours). Who will be right? According to Powell's opinion, it can be concluded that the PMI report does not point to a recession in the US. – it is compatible with the travel speed of the economy at a rate of 2% – but with a slowdown. And that the ratio between the 10-year and 2-year interest rates does not mean an investment. The steepness maintains a positive air of 10 basis points. Whenever there was a shrinkage, the mattress disappeared (and turned it) in a clear and violent way. The curve can be legible: it can give rise to doubts about the quality of your forecast, but not to the fact that it was turned or not. A brief eclipse is just an anecdote; No, the trigger.

Is it possible to twist a dark fate? What kind of task should the central banks have? The most important decision should in reality be taken by the White House. The global recession, which has already begun, is the trade in goods that nests in the manufacturing industry, leads to a drop in new export orders (and a precautionary investment brake). This is a shop, stupid! President Trump sees the straw in Powell's eye, but holds a ray that hampers the way of the international economy. It is time to conclude a trade dispute with China – and we do not want to reopen it for the automotive industry (and agriculture) with Europe. It's still time.

[ad_2]

Source link