Simply Economics

The historic hole the global economy is falling into defies description. Jeremy Hawkins and Mark Pender discuss upcoming data, just released data, currencies, equities and also Europe's limited reaction to the crisis.

With oil collapsing and infection rates still high, good news is hard to find. But Jeremy Hawkins and Mark Pender do their best, pointing to stability in the latest data out of China and a sharp jump in an expectations reading out of Germany where restrictions are easing.

Jeremy Hawkins and Mark Pender discuss the possible depth of global contraction underway along with key indicators that are coming up. Relative regional performances and relative stimulus efforts are also discussed, all against a backdrop of easing infection rates.

Stock markets appear to be looking past an approaching round of numbingly bad economic data. Our panel discusses the coming numbers including next week's round out of China where quarter-end improvement is a possibility.

Global economic data now coming out for the month or March have not all been dire. Jeremy Hawkins and Mark Pender explore the latest numbers; what they mean and the care needed in their interpretation. They also discuss the latest policy efforts to stem virus effects.

Global flash PMIs showed abrupt and severe slowing for services but sometimes surprisingly resilient results for manufacturing. And a clear positive for recovery is the extraordinary efforts by global central banks to cut rates, backstop loans, and print money to buy government bonds. Also stepping up have been national governments which are announcing major spending initiatives with the glaring exception, at least so far, of the US government.

National governments across the world are starting to follow their central banks with fiscal stimulus incorporating, in some cases, massive spending and support programs. Jeremy Hawkins and Mark Pender discuss the latest news and data including dislocations in the financial markets and global economy.

Fiscal stimulus increasingly appears to be the best if not only option to fight the economic effects from the coronavirus given that monetary action, with global interest rates below zero or approaching zero and after a decade of quantitative easing, appears to be spent. Jeremy Hawkins and Mark Pender discuss the outlook for economic policy amid the momentous developments playing out in the financial markets.

With monetary policy already limited by low to negative interest rates, fiscal policies such as tax cuts and new spending appear to be the next course to offset the effects of the coronavirus. Our panel discusses what options may or may not be available to global policy makers.

Rising concerns about the spreading Covid-19 virus have significantly boosted investor appetites for safe haven instruments. Jeremy Hawkins discusses what the latest data tell us about the economic impact so far and what to look out for over coming months.

Fourth-quarter data were flat to negative in Europe and Japan and hint at the need for further policy stimulus going into the coronavirus. Initial February data on US manufacturing show no ill effects at all from the virus in contrast to January data that were hit hard, not by the virus, but by the 737 shutdown.

Central banks, including the US Federal Reserve, aren't yet downgrading their outlooks, but the unfolding effects of the coronavirus on Chinese output may be raising the odds for another round of global rate cuts. Jeremy Hawkins and Mark Pender also discuss a rare plunge in European economic activity at year-end as well as the risk in Asia, where economies are seeking stimulus, of an emerging currency war.

Patience will be key when assessing the unfolding impact of the coronavirus on Asian economies, though initial indications have been moderate and not dramatic. Our panel also discusses US manufacturing, which appears to be accelerating though not all the data are favorable, and also the latest numbers from Europe and the UK where weakness is the trend.

The Federal Reserve is keeping rates steady and will continue, at least for the next few months, to add liquidity to the banking system which may be good news for US markets. For UK markets, the Bank of England still sees rates going up at some point but acknowledges it may yet have to cut if the hard data do not improve. Jeremy Hawkins and Mark Pender also discuss the market impact of the coronavirus and they round up the latest economic data, including strength in Eurozone economic sentiment and indicators in the US that are pointing to a strong employment report for January.

Global data are mixed, some improving, some not. Jeremy Hawkins pinpoints some possible surprises for Thursday's European Central Bank meeting and especially the Bank of England's meeting on the following Thursday where a sudden rate cut may be a possibility.

December's employment report showed unexpected slowing in US wage growth despite high levels of employment, reviving questions over structural labor issues. In Europe, tentative signs may be emerging that the worst for the economy may be over, in turn raising new questions over the policy outlook for the European Central Bank and other central banks as well.

Our panel discusses the global outlook for early 2020 and 2020 as a whole, whether recession or economic improvement is in store and what the different paths would mean for both monetary and fiscal policy. Wage inflation, its global absence and the chances of its emergence, is a special theme of the discussion.

Exceptional strength in the new home market headlines a batch of strong US economic data that, however, still leave questions over manufacturing. In the UK and Europe, data are also improving but are nevertheless still flat, conditions that put into focus the guarded policy stances of the Bank of England and European Central Bank.

Whether it's the Fed or the Swiss National Bank or the ECB, no action is the outlook as central bankers step back and wait for prior cuts to lift growth. Jeremy Hawkins and Mark Pender also discuss German production and the question of industrial recession, and also Christine Lagarde's leadership and its implications for monetary policy and whether the ECB will be buying bio bonds.

Our panel updates the latest from the reserve banks of Australia and India as well as the Swiss National Bank and US Federal Reserve. Data effects of the Japanese tax hike and GM labor strike are also touched upon as are possible sterling ramifications from various outcomes of the UK election.