the ecb could put renewed pressure on the euro
The governors of the European Central Bank (ECB) will meet this Thursday (21 January) to set their 2016 monetary policy. The ECB president, Mario Draghi, is expected to deliver a particularly dovish statement, reiterating his determination to counter the risk of "lowflation", or long-term weakness in inflation (see article on p.8). He could once again raise the prospect of increasing quantitative easing or lowering the discount rate. If that is the case, he will reassure European investors and business leaders, temporarily at least.
woe to those who ignore china's hegemony
It is China that lays down the law in the new world order. Anyone who doubted this has been proved wrong since the beginning of 2016. Although its financial markets are less integrated than those of the developed countries, China now looks capable of setting the direction for asset values everywhere. The corollary of this postulate is that China also represents the world's major macroeconomic risk this year. Any disappointment in its performance on this front will send the industrialised world's pricey financial markets tumbling.
industry takes a back seat to consumption in gdp
The latest data on US industrial production showed a recession in the sector (see left-hand chart below). The main cause is unquestionably the oil segment, although manufacturing is slumping as well. Growth in this space as a whole was a meagre 0.7% year on year in December.
SUPER Mario is fearful of LOWFLATION
Last year saw GDP growth pick up across the Euro Zone (see left-hand chart below), fuelled by strengthening business confidence, an upturn in bank loans, a depreciating euro and slightly easing unemployment (see right-hand chart below).