Newell Palmer: Monthly Economic Notes – March 2016

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Economic Overview

Anxiety among investors and in the market is greater than it has been for some time, despite the lack of substantive change in global fundamentals.  Volatility has gone up, but remains well below panic levels.  As with any market in which there are big price drops, opportunities are opening up, but having the conviction to act is another matter.  Central banks remain key drivers of sentiment and asset prices so will probably need to provide further support via lower or even negative rates before buyers return to the market.

 

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Newell Palmer - Monthly Economic Notes March 2016

Newell Palmer: Monthly Economic Notes – February 2016

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Economic Overview

Investors have to acknowledge a new set of risks tied to socioeconomic concerns that go far beyond the realm of traditional geopolitical hazards and have the potential to roil economic activity and financial markets. The confluence of new and old political risks threatens to undermine progress made through globalisation and foster a rise in conflict between, as well as within, nations.  That is the ominous conclusion of Citibank’s team of analysts and the Carnegie Europe think tank. Such traditional geopolitical risks as armed conflict and newer socioeconomic risks like income inequality, threaten to intersect in an environment where global growth is stagnating while public expectations remain high and government capacity to effect positive change through reforms is low.

 

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Newell Palmer - Monthly Economic Notes February 2016

Newell Palmer: Monthly Economic Notes – January 2016

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Economic Overview

Global growth is expected to remain fragile in 2016. Global trade and manufacturing activity will likely struggle, and additional growth scares should be expected. This will play out within the global macro economic themes of low inflation and global policy divergence. Across the developed world, deflation scares of 2015 are expected to give way to an environment of low, but no longer falling, inflation. The bulk of the oil price plunge has likely already occurred and the gradual fall in unemployment should stabilise or increase wage inflation, ensuring that deflation is less of a risk. The US Fed is expected to continue raising interest rates whilst other central banks continue stimulus. The US economy is expected to remain resilient and there would be continued expansion in Europe and Japan.

 

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Newell Palmer - Monthly Economic Notes January 2016

Newell Palmer: Monthly Economic Notes – December 2015

 

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Economic Overview

After months of uncertainty, investors are positioning themselves for the monetary policies of the US Federal Reserve and European Central Bank (ECB) to diverge.  Top US central bank officials have been saying for months that they believed the US economic recovery was nearly robust enough to withstand an increase in the benchmark rate from nearly zero.  In contrast, the head of the ECB has indicated that the ECB is about to inject more monetary stimulus into the Eurozone economy.

 

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Newell Palmer - Monthly Economic Notes December 2016