December 7-13, 2024
Big news. Strong rise in US inflation. PPI (industrial inflation index) +0.4% per month, 7-month peak:
Рис. 1
And +3.0% per year, 19-month high:
Рис. 2
The “pure” (minus highly volatile components) PPI is at the same maximum (+3.4% per year):
Рис. 3
A natural question arises: why did the Fed leadership admit to rising inflation immediately after the elections? There are two possible answers. Either inflation was actively underestimated before the elections and the accumulated difference needs to be “caught up”. Or there is an opinion that the rate does not need to be lowered any further.
The first option is doubtful, real inflation is much higher than the official figures and against its background it would not be difficult to hide the growth figures that were demonstrated. But to ensure the inflow of capital from all over the world, a high rate would not hurt. So it is possible that the US monetary authorities (most likely under pressure from political forces) have once again changed the concept of monetary policy.
Macroeconomics. Italian industrial output -3.6% y/y, 21st consecutive monthly decline (the only longer series of declines was during Covid):
Рис. 4
In Britain -0.7% per year, the 13th minus in a row (and before that, with a 4-month pause, there was a series of 24 minuses in a row):
Рис. 5
The eurozone as a whole is down 1.2% per year, the 10th consecutive minus and the 17th in the last 18 months:
Рис. 6
Industrial production in Sweden -2.0% per year, 7th negative in a row:
Рис. 7
Sweden’s construction output is down 2.7% per year, the 25th consecutive negative (the worst in 30 years of data collection):
Рис. 8
Household spending in Sweden -1.1% per year – 7th negative in a row:
Рис. 9
Eurozone investor sentiment (Sentix review) worst in more than a year:
Рис. 10
German export volume (at current prices) at 3-year low:
Рис. 11
UK house price balance at 2-year high, excluding Covid – almost 8-year high:
Рис. 12
New Zealand manufacturing sales -1.6% y/y, 8th straight quarter of decline:
Рис. 13
New Zealand e-card sales down 2.3% per year, 9th straight loss:
Рис. 14
Brazil Business Confidence At 19-Month Low:
Рис. 15
China’s yuan lending volume is up 7.7% per year, a record low in the 27 years of statistics:
Рис. 16
Accordingly, China intends to increase stimulus for the economy.
The number of recipients of unemployment benefits in the US returned to a 3-year peak:
Рис. 17
The Bank of Australia continues to refuse to ease policy, complaining about high inflation. But the Bank of Canada cut the rate for the 5th time in a row, by 0.50% to 3.25%. The Swiss Central Bank made the 4th consecutive reduction in the interest rate, by 0.5% to 0.5%. As did the ECB (by 0.25% to 3.15%).
On the contrary, the Central Bank of Brazil raised the rate for the 3rd time in a row, now by 1.00% to 13.25%; threatens to continue tightening policy.
Main conclusions. Things are bad with global industry, so more and more countries are starting to soften their monetary policy. In the US, this has led to the beginning (even according to official data) of price growth. But let us remind you that the PPI index concerns final products in the technological chain. And for the entire production volume, the picture should be the opposite (prices usually fall against the backdrop of a decrease in production). However, here too, they are growing, albeit more slowly than the PPI data:
The reason here is that inflationary processes are superimposed on depressive ones and their complex balance is very difficult to analyze. For now, we can only note that inflationary processes are winning.
However, they are winning in other places too, just look at the coffee price chart:
Рис. 19
Well, the eggs in the US have grown by as much as 55%
And finally, a trendy question. Bitcoin.
Without going into details, less than two percent of addresses are 92.73% of all bitcoins. Now here’s the question. How quickly can the owners of these 2% make a couple of dozen million servers and get more than half? Or maybe a significant part of small wallets (which are listed at the top of the table) is the result of such work? Then change the rules? The concentration of assets in this area has reached such a level that all newcomers can lose everything … And the question is, why are people being driven into this asset?
In general, it can be noted that the negative processes in the global economy have slightly accelerated, which may be due to political reasons: the events in Syria have made many very nervous, since the Persian Gulf with its deposits is too close. Well, we wish our readers, despite everything, a successful weekend and a cloudless work week in these pre-holiday days!