Newell Palmer: Monthly Economic Notes – January 2019
With the US moving into the later stages of the business cycle, the US Federal Reserve raising interest rates, and monetary and credit conditions diverging widely across the other major global economies, the potential for renewed volatility in both equity and fixed income markets remains high.
Newell Palmer: Monthly Economic Notes – December 2018
After rebounding in Q2 to a new cycle high of 4.1%, global growth was more mixed in Q3, likely slowing a little below its recent 4% pace. US growth remained very strong, but eased to 3.0% pace. European growth slumped below 2%, while growth in China also eased modestly. Elsewhere, data across the UK, Japan and parts of the emerging markets were also less robust. A number of developments are increasingly challenging an otherwise solid outlook. This includes an intensification of political instability in Europe and the UK. The European Union (EU) continued to debate the new Italian Government’s more stimulatory fiscal stance, while the UK once again is trying to make progress on Brexit. Middle East tensions have also risen between the US, Saudi Arabia and Iran.
Newell Palmer: Monthly Economic Notes – November 2018
Global GBP growth is expected to slow from 3.9% in 2018 to trend-like 3.6% in 2019 and 3.7% in 2020. The recent era of low interest rates and low inflation (‘lower for longer’) has now transitioned to a period of rising interest rates, rising wages and central bank tightening. However, there are mixed views whether the current environment can be characterised as ‘late cycle’, given that the US, EU and Japanese economies are not exhibiting characteristics of a typical ‘late cycle’ expansion. The implication is that this cycle could extend, especially if inflation continues to rise slowly. The risks for the current cycle are trade policy, US fiscal policy and central bank policies, and these factors should be monitored.Monthly-Notes-November-2018.pdf