Market Matters Morning Report Wednesday 13th April 2016
The IMF lowers world growth forecasts & commodities rally? Last night the International Monetary Fund (IMF) lowered world growth forecasts to 3.2% from 3.4%, a figure we still believe may prove optimistic. However, as these negative headlines hit the newswires there was no reaction from markets, the reason is simple - the IMF, like ratings agencies, are behind the curve unfortunately generally playing catch up to market economists/traders. For example world interest rates have remained rooted at historically low levels, indicating no anticipated imminent pickup in economic activity - German 2 year rates are at minus 0.514%. The market will tell you how it sees things going forward and this is where Market Matters looks for clues to the direction of markets. 1. Canadian S&P Composite Index Technically the ASX200 is tricky at present as weakness from the local banking sector has more than offset the strength in the resources sector. However, when we look at the highly correlated Canadian Index the picture becomes clearer. Short term we expect:
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