Morning Report Wednesday 7 January 2015
My attention today has moved away from the continual fall in crude oil prices, to US interest rates. They are falling ahead of anticipated increases in official interest rates this year? Global growth is spluttering at best after years of interest rates close to zero with US 10 year bonds falling under 2% for the first time since mid-2013 (see chart 1), clearly Illustrating investors are losing confidence in world economies fast. We have had continual economic stimulus from World Central Banks since the GFC 5 years ago and markets now don’t believe it will result in any impact fast – yesterday, additional China stimulus was announced and the markets fell.
• Last October, the Dow fell 1496 points to 15,855 on global growth fears. The start of 2015 feels like déjà vu, as I target a correction back well under 16,000 – see chart 2.
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