Global Macro


UK wages boom from cuts to cheap foreign labour

UK wages continue to boom, rising at their fastest rate since 2008, with unemployment also near the lowest level since the mid-1970s: In sharp contrast to the broader economic slowdown that has taken Britain to the brink of recession, the Office for National Statistics said annual average pay – excluding bonuses – rose by 3.9%


IMF cuts global growth again

Via the new WEF: Global growth remains subdued. Since the April World Economic Outlook (WEO) report, the United States further increased tariffs on certain Chinese imports and China retaliated by raising tariffs on a subset of US imports. Additional escalation was averted following the June G20 summit. Global technology supply chains were threatened by the prospect of


British bosses demand migrant slaves to lower wages

We noted last week how UK wages have boomed to post-GFC highs on Brexit immigration cuts: This comes alongside the GBP crashing, driving huge competitiveness gains, de-bottlenecking Britain, lifting living standards, and even driving gains in productivity: And the tonic has been Brexit immigration cuts: The decline in EU immigration into the UK in the wake of


Horseman does lessons from Japan

Via Horseman Global’s Russell Clarke: Japan pioneered many of the monetary policies that we now find common in the Western world. Despite the Bank of Japan (“BOJ”) taking monetary policies to ever more extreme levels, including negative interest rates and very large purchases of Japanese government bonds, the Nikkei still languishes well below the all-time


Hypocrite Guardian bemoans population “crisis”

Nothing encapsulates the Fake Left’s hypocrisy better than the below whinge by The Guardian over the world’s population “crisis”: …there has been a deep and potentially catastrophic failure by the west in promoting a measure on which the future health of our planet depends: limiting numbers of our species. Until this basic task is achieved,


Asian PMIs sink

Trade truce, trade schmuce. This morning’s most China sensitive Asian PMIs have swamped any fallacious good news before it even got off the launch pad. The Korea PMI: “The continued weakness exhibited by the South Korea Manufacturing PMI during June primarily reflects the ongoing global trade slowdown. Panellists reported that this is taking its toll


Roubini: Global recession 2020

Via Nouriel Roubini: Across the advanced economies, monetary and fiscal policymakers lack the tools needed to respond to another major downturn and financial crisis. Worse, while the world no longer needs to worry about a hawkish US Federal Reserve strangling growth, it now has an even bigger problem on its hands. Last summer, my colleague Brunello


Brexit continues to boost wages

By Leith van Onselen The decline in EU immigration into the UK in the wake of the Brexit Turmoil continues to be a boon for workers, with unemployment falling to the lowest level since the 1970s and UK wages surging: Wage growth beat market and economist expectations in the three months from February to April.


Has the Fed set a “dove trap”?

Via Tim Duy at FedWatch: The Federal Reserve quickly switched gears between December 2018 and March 2019 as policy became “patient” and the two rate hikes projected for 2019 fell to zero. The backdrop for the shift was stumbling markets, softer growth data, and falling inflation. Fed officials find the turnaround of inflation particularly worrisome.


The pros and cons of MMT

Authored by Michael Every via Rabobank. Mmm…MT For those who haven’t noticed, there has been a lot of discussion about Modern Monetary Theory (MMT) in the press of late. Clearly MMT, which has actually been around for decades, is currently a hot topic at the highest levels. However, even a cursory glance above shows that it is


Nobel Prize laureate: World Economy a population “pyramid scheme”

By Leith van Onselen Nobel laureate, Steven Chu, has warned that the global economy is on an unsustainable footing, reliant on an ever-increasing population which he described as a population “pyramid” or “ponzi” scheme. From Forbes: “The world needs a new model of how to generate a rising standard of living that’s not dependent on


AEP: Global recession builds

Readers will know I always take Ambrose Evans-Pritchard with a big grain of salt. But today he is onto something is an examination of the current dynamics in the global economy: The benefit of Donald Trump’s $US1 trillion ($1.4 trillion) fiscal stimulus is fading before China comes close to touching bottom. We have hit a


What is “secular stagnation”

Via Capital Economics: A recent paper by Larry Summers and Lukasz Rachel has been doing the rounds among economists and has revived debate in financial markets about “secular stagnation”. But what is “secular stagnation”, and what might it mean for economic growth, monetary policy and asset prices? One problem is that there are competing definitions


Saxobank: MMT cometh

Via Steen Jakobsen at Saxobank: Last night’s FOMC meeting made it official: the Fed has thrown in the towel, and central banks are committed to defying the business cycle. But where does this leave us in terms of positioning for 2019, 2020 and beyond? If you are familiar with my research over the last 20 years,


Does a US/China trade deal fix everything?

Via Capital Economics: We seem to be moving towards an agreement between the US and China on trade. What would this mean for the global economy? The finer points of the deal are still unclear, but it is likely to involve Beijing agreeing to increase its imports from the US in several areas (soy, oil,


More evidence immigration suppresses wages

By Leith van Onselen As revealed in the above BBC News video and the below article from The Guardian, UK companies are experiencing a labour ‘supply shock’ from lower immigration, which has forced them to lift wages: Growing skills shortages in the UK jobs market are starting to drive up wages, according to a survey,


Chartfest 23-24 February 2019

  AUSTRALIA   5 Eyes Part Time Employment   Australia CPI Housing Wealth and Consumption Residential Rents NSW & Vic, wages & unemployment   Australian coal export destinations   Australian Commodity Exports   Australian House Prices   Australian Housing Finance   Australian Renewable Energy   Australian Services & Manufacturing   Australian Short Term Arrivals  


Why the Australian slowdown is much worse than the global one

There is one big difference between the global and local slowdowns right now. It is that while much of the world is entering an industrial recession with services economies holding up, Australia is the complete opposite. The US is seeing an industrial slowdown with services booming: Same in Europe exemplified by Germany: Same in China


IMF drops growth forecasts again

by Chris Becker As the world’s elite – besides Donald Trump who is holed up in his McMansion – descend upon Davos for the World Economic Forum, the IMF is out with an update to its growth forecasts. The timing could have been a bit better given the release of the Chinese 4Q GDP print


Credit Suisse: Is momentum investing valid?

Via Damien Boey of Credit Suisse: Momentum investing is based on the idea that tomorrow’s winners and losers will resemble yesterday’s winners and losers on average, whether on 12-month total return, or 3-month earnings revision bases. We find that macro factors can predict when momentum factors are likely to work well, although there are also


Vancouver pushes Canadian house prices lower

By Leith van Onselen The Teranet-National Bank House Price Index for December has been released, which reported a third consecutive monthly decline in home values: The Teranet–National Bank National Composite House Price IndexTM for December was down 0.3% from the previous month. It was the third consecutive monthly retreat. The component indexes were down for seven


Japan shows the world how to age gracefully

By Leith van Onselen After spending a decade worrying about the rise of Japan, economists (and population boosters) in Australia have frequently labelled Japan an ‘economic basket case’ due to its ageing (and falling) population and its slow growth in headline GDP. I have frequently challenged this argument, citing: 1. Japan’s enviously low unemployment rate,