“It has been a decade since the Federal Reserve and other central banks began cutting interest rates to zero — or even below — and injecting unprecedented amounts of cash into the global financial system via quantitative easing. And while global stocks are at or near record highs, central banks around the world are increasingly abandoning their hopes of normalizing policy with economic growth slowing. On top of that, public and private debt levels are higher than ever.
“Some central banks are prepared to take drastic measures. In February, the staff at the International Monetary Fund published a guide to make even more negative interest rates work. Meanwhile, proponents of “modern monetary theory” argue that governments should generate money and distribute it across the economy, until it reaches full employment.
“It’s clear that central bank growth models are broken and the fix isn’t more money printing. While saving our economy from a deeper crisis, central bank liquidity injections only delayed this inevitable reckoning.”
“There are more than 8m people in the UK struggling with some degree of problem debt.”
“Deutsche Bank AG cut its target for full-year revenue after suffering its ninth straight quarter of contraction, underscoring the need to put Europe’s largest investment bank on a stronger footing following the collapse of merger talks with Commerzbank AG.”
“The collapse of the Swedish krona to its lowest level in more than a decade against the dollar on Thursday was fueled by a theme permeating financial markets: global central banks. Sweden’s Riskbank joined a chorus of central banks, including Bank of Japan and the Bank of Canada in recent days, downgrading the likelihood of normalizing crisis-era monetary policies, amid mounting concerns about contracting international growth.”
“The world’s largest market isn’t buying the feel-good narrative that investors have embraced this week with global stocks sitting on the cusp of setting a record high and the riskiest corporate bonds soaring like the world economy is back in synchronized growth mode… traders in the $5 trillion-a-day foreign-exchange market are flocking to the dollar, yen and Swiss franc… “haven” currencies [which] normally outperform when the outlook is worsening, not improving.
“More and more central banks are expressing concern about the global economic outlook.”
“Major exchange rates are stuck in their deepest slumber for years, prompting comparisons to the unnaturally tranquil period before the 2008…”
“In March, Japan industrial production dropped -0.9% mom, below expectation of 0.0% mom. For the whole of Q1, industrial production contracted -2.6% yoy.
“The overall contraction in industrial production in Q1 was the largest in nearly five years, since Q2 2014. The data suggested that Japanese economy could have suffered a mild recession…”
“World trade volume… started turning down in November, and by February — according to the Merchandise World Trade Monitor, released today by CPB Netherlands Bureau for Economic Policy Analysis — it was down 3.4% from the peak in October and down 1.1% from February a year earlier.
“The less volatile three-month moving average sank for the fourth month in a row, and is down 2.4% from the October peak and down about 1% from a year earlier. This kind of decline in world trade just hasn’t happened since the Global Financial Crisis.”