Inflection Point
Ian Reynolds
Investing and Trading | Capital Markets | Macroeconomics| Bitcoin & Decentralised Finance | Helping to Find the Money Flow | Commentator | Speaker
Markets reached equilibrium last week as we wait for the news that will influence direction for the rest of 2023.
Global interest rates (G7 at least) are in sync, we are near peak rates and rate cuts this year seem unlikely. Germany is in recession, the Chinese slowdown is priced in and CPI yesterday lifted the country out of deflation.
Confusion over narrative abounds. Here's 2 reports from global financial news titans on the same economic report.
All we can say is that a big move and new direction is imminent.
And here's US CPI to set the tone.
In Case You Missed It
More pain in Europe
The Euro has now had 6 weeks of being under pressure
And CPI is stubbornly high
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Japan
The Bank of Japan (BOJ) will be able to gradually shift away from its easy monetary policy only after ensuring its 2% inflation goal has been sustainably achieved, former board member Goushi Kataoka said on Monday.
Australia
RBA kept rates unchanged. The Voice referendum looks to be an abject failure for the Labour Government and Phil Lowe moves on from the RBA. An uneasy silence.
RBA statement: “The central forecast is for CPI inflation to continue to decline and to be back within the 2–3 per cent target range in late 2025.”
In his final speech as governor, Dr Lowe warned there was a “material risk” that Australia’s living standards would stagnate without urgent action by governments to address the “political problem” of low productivity, which has fallen to its lowest level in seven years.
Outgoing Reserve Bank governor Philip Lowe says the government should hand over some of its taxing and spending powers to an independent body to reduce the reliance on the central bank in managing the economy.
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