Q1 showed little sign of improvement in the world’s second-tier auto markets – Brazil, Russia, India, Japan. In total, their sales used to equal those of the EU, the world’s 3rd largest market. But Q1 volumes saw a 16% decline versus 2014 levels, as the chart shows: Japan’s sales were boosted in 2014 (blue column) by buying ahead […]
Chemicals and the Economy
Lower oil prices support European cracker operating rates
Who would have believed, a few years ago, that European cracker operators would see an operating rate of 84% as something to celebrate? It would have been thought a disaster prior to 2008, when rates typically ranged around 90%. But whilst nobody is flying flags, last year was the best year since 2007. And as […]
China’s used car market set to drive future auto sales growth
China’s auto market is going through major change. Tier 1 cities have imposed limits on car ownership, and car use by government officials is being severely restricted. In addition, the lending bubble that drove major growth in recent years is coming to an end. Perhaps even more importantly for the medium term, a used car market is now developing […]
Market volatility jumps as Great Unwinding continues
As I have feared, major volatility is developing in financial and chemical markets, as the Great Unwinding of policymaker stimulus continues. The chart above shows the dramatic increase in the benchmark portfolio since the Unwinding began in mid-August: There was very little volatility from January until August, with prices generally remaining within +/- 10% Volatility then […]
Europe’s QE programme fails to support US markets
Its been a fine run for the Boom/Gloom Index of financial market sentiment. Every time it has weakened, as in January, central banks have rushed to support it with ever-larger volumes of free cash. But the European Central Bank’s new €60bn/month ($65bn) programme doesn’t seem to be providing the same support for US equities as before, […]
IMF says world seeing “a New Reality of lower potential growth”
After 6 years of largely-wasted stimulus efforts, the world’s economic advisory bodies are finally having to accept that ageing populations really do impact economic growth. The latest International Monetary Fund’s latest World Economic Outlook finally breaks half of the taboo that has stopped most economists from accepting this seemingly common sense conclusion. Its Summary argues as […]
China GDP may fall to 1.7% in Q4, warns Bank of England
It seems that China is preparing for a difficult 18 months. President Xi and Premier Li have to implement key decisions now, that will create winners and losers. This is therefore the moment when they have to take the pain that results from the need to reverse the ‘lost decade’ under Hu and Wen. Otherwise, they will […]
US jobs growth stalls as shale gas bubble ends
Apparently Friday’s US jobs numbers disappointed the experts. The consensus forecast was that 250k jobs would have been created in March – yet only half the forecast actually appeared. Even more tellingly, hiring estimates for January/February were revised down. Separate data also showed weak growth in wages and spending. None of this was really a surprise, […]
Volatility rises as central bank policies prove wishful thinking
Q1 was very difficult for many companies and investors. They had wanted to believe since 2009 that central banks could somehow control the global economy: The oil price would always be $100/bbl The US $ would always remain weak Central banks would always be able to stimulate growth in the economy Stock markets would always go up in the […]
A toxic combination for economic policy
UK economic policy is now coming under discussion, as May’s Gemeral Election approaches. The Financial Times has kindly printed my letter below, highlighting the economic impact of the demographic changes now underway. April 1, 2015 9:34 pm Sir, Your editorial “Zero significance in the UK inflation milestone”, (March 27) ignores the impact of two critical variables. As […]
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