“The global bull run that started in 1985 is now one of the most intense in the debt market’s 700-year history, comparable with a deleveraging and economic growth spurt that followed the Napoleonic wars.
“Despite longstanding predictions of the end of the bond bull market that started after former Federal Reserve chair Paul Volcker quashed inflation in the 1980s, government debt has kept rallying this year, taking the average annual fall in yields to 17.4 basis points (0.174 percentage points) over the past 34 years.
“That puts it on the cusp of surpassing the 1873-1909 bull run in length, and makes it the strongest decline in long-term interest rates since 1817-1854, when bond yields declined by 22 bps a year, according to research by Paul Schmelzing, a visiting scholar at the Bank of England.”
“Global interest rates are low and may head lower, driven by slowing economies and the U.S.-China trade war.
“A less appreciated reason for lower rates is a mountain of debt built up during the past decade.
“Debt owed by governments, businesses and households around the globe is up nearly 50% since before the financial crisis to $246.6 trillion at the beginning of March, according to the Institute of International Finance, an association of global financial firms.”
“U.K. Warned It Lacks Policy Tools to Avert ‘Painful’ Recession. Rate cuts, QE would provide limited support, think tank says. Fiscal policy needs to play more active role in any downturn.”
“This week’s European Central Bank meeting is shaping up as one of the most anticipated in years as the central bank gears up to boost a frail economy with a series of stimulus measures.
“A global trade war threatens to push the powerhouse German economy into recession and headwinds from Brexit are becoming stronger.”
“Turkey’s gross domestic product shrank 1.5% year-on-year in the second quarter, according to official figures released this week, with a dramatic decrease in investments standing out as a major driver of the contraction.
“The decline in investments — both in the private and public sector — has been going on for 12 months, bearing heavily on joblessness.”
“Dubai is closer to emerging from a prolonged bout of deflation even as business conditions turn worse.
“Prices were “broadly unchanged” in August after output charges declined in each of the past 15 months, according to IHS Markit.”
“India’s industry leaders are eyeing for a government decision on possible GST rate cut to boost sales. The automobile sales shrunk further during the month of August, a prolonged timeframe as consumer sentiments are still weak when it comes to purchasing a new vehicle.
“The passenger car sales declined by 41 per cent year-on-year (YoY) in August…”
“More than 2.4% of total loans in India’s banking system may be under stress on top of the 9.6% bad debt ratio as of June, the highest among major economies, Credit Suisse estimates shows. …
“The failure to slash stressed assets is undermining India’s efforts to revive economic growth that has cooled to a six-year low.”
“China’s exports fell unexpectedly in August as the trade war with the United States continued to hit the world’s second-largest economy.
“Shipments fell by 1 per cent in the month after growing 3.3 per cent in July in dollar terms, and below the 2.1 per cent growth expected by analysts in a Bloomberg poll.”
“Nissan Motor Co is considering pulling out of South Korea, the Financial Times reported on Friday, as political and trade tensions between Japan and South Korea have caused sales of Japanese products in the neighbouring country to plummet.
“Nissan and other Japanese firms have been a casualty of consumer boycotts of products ranging from cars to beer in South Korea…”
“Weakness in the global economy and worsening trade protectionism have emerged as risks to growth and added some pressure for the Bank of Japan (BOJ) to expand stimulus when it meets next week.
“The economy grew an annualised 1.3% in April-June, revised Cabinet Office data showed Monday, weaker than the preliminary reading for 1.8% annualised growth and in line with economists’ median forecast…”
“Regulators are surveying Japan’s financial firms to determine their exposure to foreign assets, including risky credit products, as the global economy slows, according to sources.
“The Bank of Japan and Financial Services Agency want to get a more detailed picture of domestic banks’ and insurers’ investments in collateralized loan obligations (CLOs) and leveraged loans to assess how they will fare if the borrowers run into difficulties, the sources said.”
“Indonesia’s economy, which has been growing steadily at around 5.3 percent per year on average since the start of the millennium, could be dragged down as it faces downside risks associated with the increasingly clouded outlook for the global environment, the World Bank has said…”
“Parlous consumption [in Australia] was one of the big drags on the economy, which is not surprising, considering what’s been happening with wages growth. It’s been woeful…
“”The last six years has been the worst period for wages growth since the Second World War,” says Jim Stanford, chief economist and director of The Australia Institute’s Centre for Future Work.”
“Our current economic success [NZ] is a debt-fuelled Ponzi scheme where everyone has a stake in the fictional statements issued each month.
“The party is going to end and it will not be pretty. Since the Great Depression, Western economies have run a predictable course.”
“Numerous indicators in the U.S. and around the world are signaling a slowing economy at best and a near-term recession at worst.
“The slowing global economy, along with low interest rates, ongoing trade tensions, and intensifying Brexit uncertainty will weigh on banks’ profitability for the foreseeable future. In the US, whatever benefits banks derived from Trump’s tax reform, if any, are long gone.”
“In the United States, corporate and residential property investments have ceased to contribute to growth… “In the eurozone, the low level of the IFO business climate index in Germany reflects the lack of any improvement in the manufacturing sector, which continues to be affected by weak global trade”, explains Guy Wagner, Chief Investment Officer and managing director of the asset management company BLI – Banque de Luxembourg Investments.
“”The global economic slowdown seems to be intensifying.””