European Union and Eurozone trade statistics for 2018 – EU swings to a trade deficit; EU – record trade surplus with the U.S. and record trade deficit with Russia; UK had largest intra-EU trade deficit

The first estimate of Euro area or Eurozone (EA19) and European Union (EU28) trade statistics by Eurostat for 2018 reveals several interesting insights.

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The Baltic Dry Index is down 48% over the past month

The Baltic Dry Index is a trade indicator that measures shipping prices of major raw materials and is often seen as a global growth indicator. The index is based on a daily survey of agents all over the world.

 The Baltic Dry Index is down 48% over the past month (and down 47% over the past year). Is this an indicator of more trouble around global growth?

Baltic Dry Index 20190212

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Government bond yields have been falling globally

We haven’t written about government bond yields recently but there has been a lot of action in the bond market. Government bond yields have been falling globally which are an indicator that markets are expecting stagnant or falling interest rates. 10-year government bonds are the most tracked and traded and yields have mostly fallen compared to a year ago.

The U.S. 10-year Treasury bond yield is now at 2.65%, down 19 bps from a year ago.

US 10 year government bond yield 20190210 1year change

 

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European Commission (again) cuts GDP growth forecast for the European Union; Bank of England cuts UK GDP growth forecast; Germany forecast to grow slower than the UK despite Brexit

The European Commission slashed their GDP growth forecast for the European Union (excluding the United Kingdom) and the Eurozone for 2019 and 2020 citing slowing growth in China and weakening global trade.

The growth forecast for 2019 for the European Union (excluding the United Kingdom) was cut to 1.5% for 2019 (was previously forecast 2%) and for the Eurozone was cut to 1.3% (was previously forecast 1.9%).

Germany, Italy and the Netherlands all saw big downgrades for their growth outlook.

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Is Household Debt in the U.S. really a bigger problem than before the financial crisis?

There are various ways to look at Household Debt (total debt outstanding including mortgages, loans, credit cards and other debt) in the United States, we look at two today.

The first is debt servicing costs to disposable income which effectively is how much it costs to service household debt as a fraction of disposable (after tax) income. The second is household debt outstanding to disposable income which effectively is how much debt there is with respect to the same disposable (after tax) income measure.

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