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Jul 17, 2014

Global growth prospects dim even as asset prices fly higher: Reuters poll

By Ross Finley and Sumanta Dey

(Reuters) – Global growth prospects have dimmed slightly, with the United States and Britain leading industrialized economies that are not generating much inflation even after years of aggressive monetary stimulus, Reuters polls found.

While China’s economic growth broadly stabilized in the latest quarter, the threat of a sharp correction in its overextended property market and any aftershocks remains the biggest danger for the world economy.

Jul 16, 2014
via MacroScope

Tight consensus on China’s growth rate not reflecting real range of opinion


China’s economy, even to a non-specialist given a few minutes to stop and think, is clearly extremely difficult to measure.

When your population is 1.4 billion and you are in the midst of an unprecedented government and credit-fuelled expansion in infrastructure on your way to developed economy status, there are plenty of things that may get overlooked.

Jul 15, 2014
via MacroScope

Fed and BoE to markets: pay attention to pay


It is more than a bit ironic that those paid the most to pay attention to incoming data aren’t paying enough attention to pay.

Both Bank of England Governor Mark Carney and Federal Reserve Chair Janet Yellen have dropped many hints in speeches and public policy statements over the past several months that wage inflation likely will play an important role in any decision to raise interest rates.

Jul 7, 2014
via MacroScope

U.S. hiring may be rebounding, but wage growth is not


The U.S. job market has finally turned a corner. What is remarkable is that it has taken so long.

Companies have finally begun taking on staff in consistently greater numbers, half a decade after the end of a deep recession brought on by one of the most punishing financial crises in history.

Jul 1, 2014
via MacroScope

Deflating euro zone inflation expectations


The euro zone is not deflating, it’s just at risk of a too-prolonged period of low inflation, says European Central Bank President Mario Draghi.

Judging by recent evidence, it might be very prolonged, which is bad news for an economy struggling to shift out of low gear.

Jun 17, 2014
via MacroScope

Weak UK inflation casts doubt on interest rate hike this year


Bank of England Governor Mark Carney shocked markets last week, saying interest rates could rise sooner than expected.

At first glance, the latest UK inflation data suggest they might not.

Inflation has nearly halved to 1.5 percent in May from 2.9 percent last June. And wage inflation is much lower.

Jun 13, 2014
via MacroScope

UK rate rise this year? Possible, but not certain yet


“It could happen sooner than markets currently expect.”

That was the bomb of a headline Bank of England Mark Carney dropped in a speech on Thursday that suggested a significant change in tone at the bank.

So far, Carney has seemed comfortable with keeping rates at a record low of 0.5 percent for another year. That has been the forward guidance markets have been following.

Jun 11, 2014
via MacroScope

Canada housing: This time it’s different, eh


Results are in from the latest Reuters poll on Canada’s rampant property market from economists and market analysts, and the message is everything’s fine.

Prices will rise gradually over the next few years and there is very little risk of a crash.

Jun 10, 2014
via MacroScope

Better U.S. growth and just muddling along both point to low rates for longer


Faith that the U.S. economy may finally be at a turning point for the better appears to be on the rise, as many ramp up expectations for a better Q2 and second half of the year.

But that does not mean that interest rates are likely to rise any sooner.

Goldman Sachs’s Jan Hatzius, one of the most dovish economists on when the Federal Reserve will eventually raise rates, has lifted his growth outlook but stuck to the view that the first interest rate rise off the near-zero floor won’t come for nearly two years, in early 2016.

Jun 9, 2014
via MacroScope

Euro needs the Fed, or QE, for the next leg down


It has become increasingly clear it takes a lot more than words to sink the euro.

The European Central Bank cut rates as low as they will go on Thursday and announced another round of cheap cash for banks, hoping the euro, which has helped knock down inflation in the fragile euro zone economy, will fall.

    • About Ross

      "Ross Finley, Global Editor, Reuters Polls & Economic Data, commissions consensus forecasts and edits related news stories on everything from foreign exchange rates to stock markets to expectations on monetary policy from major central banks. He is based in London."
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