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European Central Bank President Mario Draghi will step down at the end of his eight-year term on 31 October. Christine Lagarde, the head of the IMF – which has implicitly called for looser global monetary policy – will take over pending European Parliamentary approval. The ECB’s dovish turn at its 6th June policy meeting, Draghi’s talk of possible monetary policy
Read moreMarket focus is likely to centre on tomorrow’s G20 meeting between US President Trump and his Chinese counterpart Xi Jinping (11:30 local time). The broader context is the direct, negative impact which the ongoing US-China trade war has had on US and global economic growth and its dovish influence on the monetary policy stance and outlook of major central banks,
Read moreRetail sales are broadly defined as the sale of durable and non-durable goods by domestic retail establishments (including on-line) to domestic households and tourists. For most developed and emerging market economies retail sales are an important component of personal consumption and thus of overall GDP and historically growth in the global volume of retail sales has closely correlated with global
Read moreIn line with our forecasts, the 60bp of central bank rate hikes in 2018 is contributing to the ongoing slowdown in global GDP growth, which we estimate will fall below 3% yoy in Q1 2019 for the first time since Q3 2016. The broad-based moderation in global economic growth, along with the fall in crude oil prices, has pushed global
Read moreIn the UK the House of Commons voted against the draft Brexit deal by a crushing majority of 230 – in line with our forecast (Tuesday 11th December: Brexit D-Day, 4 December 2018). With the UK due to exit the EU in only 70 days, the British government is fast running out of time and options and Sterling volatility is
Read moreThis report examines the monthly seasonal patterns of 32 major Nominal Effective Exchange Rates (NEERs) going back to January 2011, using 76,600 daily data points. The NEER provides a more accurate overall picture (than the exchange rate versus the Dollar or other individual currencies) of a country’s currency and trade competitiveness and risks of imported inflation/deflation and is therefore an
Read morePrice action in markets deprived of tier-one macro data over the Christmas and New Year period has centred on acute volatility in US and global equities, with sizeable intra-day swings including a temporary flash crash in the USD/JPY cross below 105 on 3rd January. The US government shutdown, ongoing concerns about the US-China trade war, the slowdown in global economic
Read moreToo little attention has been paid to the global rise in central bank policy rates in the past 6-7 months and its implications for economic growth, CPI-inflation and currency and rates markets. Central bank rate hikes in Emerging Market (EM) economies, along in some cases with central bank FX intervention and other policy measures, have helped stabilise under-pressure currencies, particularly
Read moreNote: I will be in Singapore from 1st to 6th November. Please contact me at odesbarres@4xgr.com or on +44 7855 254 199 for a one-on-one meeting. Historically, central banks’ policy rates have tended to track core CPI-inflation, which excludes volatile items such as food and energy, rather than headline CPI-inflation, resulting in a broadly stable global “core” real policy rate.
Read moreThis is a summary – Read the full research piece here Olivier DesbarresOlivier is an economist and rates & FX strategist with over 22 years experience in financial markets. He is Director and Founder of 4X Global Research, an independent, London-based consultancy which provides institutional and corporate clients with substantive research, high-quality analysis and insight on emerging and
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