It is important to differentiate here between the market related and the real economic impact of the Brexit vote. The market shock was indeed less severe than many investors had feared.
The latest economic data showed the US economy grew at a 1.2% pace in the Q2 and the country's retail sales showed no growth in July, driving the price of gold higher. In your point of view, will gold remain high or is it just a temporary appreciation?To my mind, it is going to remain high, as the US economy
I think the likelihood of a deal among the OPEC producers is low, though we have not ruled that out entirely. The reality is that they failed at the Qatar meeting in April
I think there are already signs of an industrial recovery in Russia. In fact, industrial production expanded in year-on-year terms in the second quarter of this year; though more generally, it seems to be the only sector of the economy that really shows signs of improvement.
I do not think this data is strong enough to see a hike as soon as next month. The employment growth has obviously accelerated again in the last couple of months; however, while that is encouraging, we still have some sides of slack in the labour market.
I think we will see a rebound from the May print but the pace of growth is likely to still remain quite subdued. At this point, what is really going on is that once the economy heals from the wildfires impact, what we will need to see is more evidence that growth in the non-energy sector is continuing.
For the Euro side, it will probably be quite minimal, most certainly we will see a little dip in the Q3 as a result; however, I doubt that it will linger beyond the next six months.
Overall, in terms of economic data, we have seen better than expected inflation development in the second quarter. Particularly, the preferred inflation measure by the RBA, the "Trimmed Mean", stayed stable at 1.7% instead of declining towards 1.5% as analysts as well as the RBA had anticipated.
We know that NPLs in Italy is around €360bn according to IMF estimate, which is a very big number. We also know that the Italian economy has shown real problems in creating stable recovery.
According to the ISM's recent reports, services sector looks solid indeed; however, it is still not at the great level. As concerns the ISM manufacturing index, we have seen a little bounce recently, but at the moment we do not see much further improvement for a couple of reasons.
Certainly, the Bank of England has to ensure that banks continue to function and can provide a supply of credit.
It mostly depends on what happens to the global fears over ‘Brexit'. If we see a big pick up in risk aversion, perhaps on worries about the outlook for the wider EU, then the Yen will almost certainly strengthen further.
Since November last year, The People's Bank of China has been targeting both the USD/CNH currency pair and currency basket, as they have their own CFETS RMB Index's currency basket, which means that the PBOC is no longer forced to follow the USD.
I think it is reasonable, although it is still questionable. The reason for me to say that is the weakness in the US economy that we are seeing right now, which is coming through labour markets, particularly through slower employment growth that historically has been a very key indicator of expansion and contraction in the US economy.
It is difficult to measure; however, overall, the debt to GDP ratio in China is now above 200%. One can base their measurement using different statistic data, but, in general, it is above 200%, and a lot of it lies on the corporate sector.
It is a very difficult question. On the one hand, it is temporary to the extent that the whole situation was mainly driven by ‘Brexit'-related fears in financial markets and the fact that the ECB is still in the market, obviously.
It is difficult to make a forecast for the price of oil to stay at $45 for the remainder of 2016. It could end up there, but there is almost certainly going to be some significant volatility between now and then.
I believe that during the summer driving season here, in the United States, we will most probably test $60 a barrel, especially if the Federal Reserve makes a decision on interest rates this summer.
Russia may enter the path of slow growth in the upcoming months, unless there are new external shocks, the Russian Central Bank stated on May 30. In your opinion, is it a reasonable statement or not? Why?To my mind, it could be so, because if we take a look at the seasonally adjusted indicators, then we can clearly see that
Not only did the worst NFP figure since September 2010 send rate hike expectations to virtually zero for June, but Yellen further diminished expectations for a rate hike in the immediate future in her speech on Monday.
While bookmakers' betting odds currently suggest that the UK will vote to remain in the EU by a significant margin in the referendum, the opinion polls have tended to be a lot closer, suggesting that the remain and leave camps are roughly neck and neck.
To put it simply, markets do not like uncertainty, even when news sources are of varying levels of credibility.
To my mind, that is a fairly reasonable assumption. The Fort McMurray wildfires are inherently a transitory shock that will impact the economy.
On the US side, the indicators were mixed last week, as housing data was solid, while durable goods orders came out weak. Besides, GDP posted a lukewarm gain of 0.8%, making the Fed's Chair Yellen keep the door open to a June rate hike. In the meantime, the Bank of Canada kept rates at 0.50%. Which of the abovementioned fundamentals