Ukraine

Bond markets reach “The End of the Beginning” as traders finally realise rates will be higher for longer

300+ years of Bank of England data shows that interest rates are typically inflation plus 2.5%. At today’s level, this would imply – US rates would be 3.7% + 2.5% = 6.2%: Japan would be 3.2% + 2.5% = 5.7%: Eurozone rates would be 5.3% + 2.5% = 7.8%; UK rates would be 6.7% + 2.5% = 9.2%

Bond markets reach “The End of the Beginning” as traders finally realise rates will be higher for longer Read More

“We now understand better how little we understand about inflation”, Jay Powell, US Federal Reserve Chairman

We are facing a perfect storm of global food, energy and financial crises set off by the war in Ukraine.  Analysts need to stop focusing on monetary policy and the inversion of the yield curve. They need to look out of the window and start dealing with the geopolitical reality of Putinflation. 

“We now understand better how little we understand about inflation”, Jay Powell, US Federal Reserve Chairman Read More

Wall Street finally recognises a recession is underway – “It’s a hurricane…coming our way”

There are positives in all this, as the Green agenda will create new opportunities to replace those that are now disappearing. But for the moment, at least, the risks associated with a likely lengthy and deep recession are likely to dominate. Please be careful out there.

Wall Street finally recognises a recession is underway – “It’s a hurricane…coming our way” Read More

Europe’s plastics companies need to step up the pace on recycling if they want to stay in business

Europe’s plastic industry is at a critical turning point. Profitability is falling as the recession bites. But it cannot just cut back and hunker down. Instead, it has to take a lead in building major new recycling capacity, as current markets and feedstocks start to disappear.

Europe’s plastics companies need to step up the pace on recycling if they want to stay in business Read More

Ukraine, pandemic, herald major market shifts

Energy and financial markets are exacerbating the risks ahead. Oil prices at current levels – as the chart confirms, they now account for more than 3% of global GDP – have historically led to recession as the chart shows. The reason is that consumers have to cut back on their discretionary spending, which drives economic growth, in order to heat their homes and travel to work and school. Today’s high levels of natural gas prices add to this risk.

Ukraine, pandemic, herald major market shifts Read More