So far so good: Commodity prices suggest that the global economy is holding up well despite the latest emerging markets crisis. This confirms that the crisis remains contained mostly to the F-5 and isn’t morphing into a contagion--so far, knock on wood. I construct a YRI Global Growth Barometer by simply averaging the price of a barrel of Brent crude oil with the CRB raw industrials spot price index.
Our YRI-GGB registered 106 on Monday. It has been fluctuating around this level for the past two years. Both components are very sensitive indicators of global economic activity. Both are holding up remarkably well given the headline news about the EM crisis and the strength of the dollar, which tends to depress commodity prices.
Today's Morning Briefing: Fragile Fear. (1) The Fragile Five are submerging. (2) Fickle short-term capital flows. (3) Are F-5 scarier than five PIIGS? (4) Greece again, but no Grexit. (5) EMs do matter to both US and the world. (6) The F-5 may not matter all that much. (7) Severe devaluations stress F-5 with higher import prices, and wider trade and budget deficits. (8) Not much stress in commodity prices so far. (More for subscribers.)
Our YRI-GGB registered 106 on Monday. It has been fluctuating around this level for the past two years. Both components are very sensitive indicators of global economic activity. Both are holding up remarkably well given the headline news about the EM crisis and the strength of the dollar, which tends to depress commodity prices.
Today's Morning Briefing: Fragile Fear. (1) The Fragile Five are submerging. (2) Fickle short-term capital flows. (3) Are F-5 scarier than five PIIGS? (4) Greece again, but no Grexit. (5) EMs do matter to both US and the world. (6) The F-5 may not matter all that much. (7) Severe devaluations stress F-5 with higher import prices, and wider trade and budget deficits. (8) Not much stress in commodity prices so far. (More for subscribers.)
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