Q3 was supposed to be the turning point for the global economy. Back in April, the IMF had announced: “Global prospects have improved again but the road to recovery in the advanced economies will remain bumpy. World output growth is forecast to reach 3¼% in 2013 and 4% in 2014. In the major advanced economies, […]
Chemicals and the Economy
“I’m Sorry, America” says Fed’s official responsible for QE operations
Over the years, the blog has been very critical of the quality of people appointed by the US Federal Reserve to undertake the actual trading involved in its ‘Quantitative Easing’ (QE) programmes: In October 2008, it felt “distinctly underwhelmed” by news that the person supervising decisions on which financial institutions should live or die during the peak of the Crisis […]
Asian ethylene margins soar on China stimulus, plant outages
Volatility is one of the blog’s key themes for the next few years, as the world transitions to slower growth and a more regional economy. And the chart above from the latest ICIS pricing Asian ethylene margin report highlights this new trend very well: Margins jumped 42% last week to reach $290/t, based on naphtha […]
October’s US jobs increase in line with seasonal trends
Last Friday’s US jobs report seemed to surprise most of the experts. But looking at the chart above, it is hard to see why US financial markets jumped 1% when the numbers were published: •It shows the seasonal pattern in the US job market since 2007 (orange line) •Clearly 2008 (blue) broke the normal trend […]
“Deflation fears spark shock ECB rate cut”
The mention of deflation in the above front page headline of Friday’s Financial Times will not have surprised blog readers. But it appears that not enough people in the European Central Bank read the blog, as the FT went on to report the ECB’s sense of “shock” at the thought that deflation could now be just around the corner. This highlights the enormous […]
Quantitative Easing – where it all went wrong
Back in September 2011, the Bank of England published the chart above to show how it expected Quantitative Easing (QE) to revive the UK economy*. It argued: “How does the economy adjust to asset purchases? “The overall effect of asset purchases on the macroeconomy can be broken down into two stages: an initial ‘impact’ phase and an ‘adjustment’ […]
Global chemical operating rates remain well below SuperCycle levels
The latest American Chemistry Council report on global production shows output was up 3% versus September 2012, and just 18% above average 2007 levels. There was a mixed picture in the main Regions: Asia-Pacific was strongest, up 5.9%, with Japan accelerating as the weak yen helped its exports The Middle East continued to slow, and was up […]
US auto sales reward agility in spotting opportunities
We are now into the seasonally weaker selling part of the year for US auto markets, as the chart shows. The big months for volume are always March – August, and then sales slow until December – when manufacturers offer ‘special deals’ to boost their annual numbers. On this basis, October seems to have been a […]
China’s PVC demand confirms need for economic policy changes
China’s new leadership have a double task as they head into Saturday’s critical economic plenum, which will decide policy for the next 10 years. On the one hand they have to avoid the appearance of crisis, and ‘keep the show on the road’. It would be fatal to allow their agenda to be hijacked by […]
Benzene highlights rising risks in financial markets
The blog is busy preparing its presentations for its World Aromatics and Derivatives Conference later this month, co-organised as always with ICIS. As well as looking at the impact of the transition to the New Normal, it will be investigating the current state of benzene markets. These are always an excellent leading indicator for the global […]
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