Global Interest Rate Cycle

Ian Reynolds July 22, 2023

Global Interest Rates

As US rates seem to peak (for now at least), and with European and Japanese CPI finally trending lower, global interest rate movements look to be synchronised.

Stock markets have been buoyant driven by AI frenzy and more money supply emanating from the US banking crisis.

So we reach a tipping point for the global economy. FED, ECB and BOJ Monetary Policy meetings are this week. This represents 3 out of 4 biggest economies in the world.

Chinese woes have been reported recently. Deflation, lower GDP than forecast and lower global demand for their goods.

China youth unemployment hits high as recovery falters [BBC]

It's nearly August, which is when markets get significantly thinner due to UK vacations. Most dramatic market events have happened in September and October when London markets are back to full strength.

Now is the time to be placing bets for the next market moves.

In Case You Missed It

China GDP lower than expected

Japan CP lower than expected

UK CPI lower than expected

Australia

Investor exodus threatens house prices [AFR]

RBA Monetary Policy Statement from 4 July 2023 [RBA]

New RBA Governor, Michele Bullock started her tenure with an unexpected unemployment report showing the economy produced more new jobs than expected and an unemployment rate back down to the lowest ever.

Bullocks recent remarks than unemployment needs to rise above 4% to alleviate inflation pressures has pitted her against Treasurer Chalmers and now unions, whose influence in Australia, has grown significantly with the new Labour Government.

Victoria's decision to cancel the Commonwealth Games, and the Federal Government not coming to the rescue, has produced a new focus on the dire state of Australian Government finances.