A decade on from the financial crisis, 38 countries currently have interest rates at an all-time low. Ultra-low interest rates seem to be the tool of choice for Central Banks to help stimulate economies globally. But seriously, this a decade on from the financial crisis? Did the world really recover from the financial crisis? Probably not …
Apparently, the European Central Bank (ECB) balance sheet was meant to shrink significantly in 2019. It has shrunk just 0.5% in 2019 until July 5th (as against 5% for the Federal Reserve in the same period).
At 4.67 trillion Euros (or around 41% of Euro area or Eurozone GDP), it doesn’t look like things are going to change quickly.
Here are global central bank interest rates for each country in a table (in increasing order of interest rate in % on July 1, 2019),
Money supply is simply the total amount of money in circulation in a country. For the U.S. there are several components of the money supply: M1, M2, and MZM (M3 is no longer tracked by the Federal Reserve); these components are arranged on a spectrum of narrowest to broadest.
The seasonally adjusted current account of the balance of payments for the European Union was a surplus of €40.5billion or 1% of GDP in the first quarter (Q1) of 2019, up from a surplus of €40.2billion or 1.0% of GDP in the fourth quarter (Q4) of 2018 and down from a surplus of €58.3billion or 1.5% of GDP in the first quarter (Q1) of 2018, according to estimates released by Eurostat.
The United Kingdom’s trade deficit more than doubled to a record £20.3 billion in the first quarter (Q1) of 2019, or 3.7% of GDP. This was the fifth consecutive quarter of deterioration.
The last time the UK’s trade deficit was over 3% of GDP was in Q2 2002.
Australia’s Central Bank, the Reserve Bank of Australia (RBA) cut its benchmark cash rate by 25 basis points to an all-time low of 1%. This following a cut of 25 basis points in June. This is the first time since 2012 that the RBA has delivered back-to-back interest rate cuts.
Strong or weak economy? We look at
- The personal saving rate
- Consumer loan growth rate
- Growth rate of disposable personal income per capita
- Growth rate of personal consumption expenditures per capita
U.S. Equities Soar
June 2019 saw U.S. equity market records being broken shattered.
The Dow Jones Industrial Average (DJIA) gained 7% in June, its biggest June gain in 9 decades or its best June since 1938.
The S&P 500 jumped 6.9%, its best June performance in 7 decades or its best June since 1955. The S&P 500 is up 17% in 2019 so far, the best start to a year since 1997.
After a very quiet few weeks, we will restart normal service beginning July 1. We promise to again bring you a completely refreshing perspective on everything finance, markets and banking. This time it is different.