More bad news than good

Wednesday 22 October 2008 - More bad news than good

Presented by Andrew Cates




+ The economic and market environment has continued to generate more bad news than good news. The good news is that tentative signs continue to emerge to suggest that the plumbing of the inter-bank lending markets is being mended. The bad news is that evidence continues to mount suggesting that the economic and earnings environment is deteriorating sharply.


+ The latest weekly ABC estimate of US consumer confidence dropped again and now stands just 1 point off its all time low. Japan's all industry tertiary index tumbled by 1.8% in August, below expectations. This follows steep drops in yesterday's weekly estimates of US store sales. And it follows yesterday's dreadful UK CBI industrial trends survey for Q4. The UK's NiESR and BoE Governor King have warned that the UK economy is now entering recession.


+ Markets been responding to this with oil and equity prices dropping sharply in the US and Asia. The euro is also weaker thanks in part perhaps to the somewhat circular relationship that the US dollar enjoys with commodity prices but more importantly perhaps due to a safe-haven bid for other US dollar assets.


+ The day ahead is a fairly quiet one for economic data with the latest Bank of England monetary minutes the only item of any note. We expect these to reveal a 9 to 0 vote for the 50bps that was enacted though it is possible that Blanchflower voted for a little more.

Category:

News & Politics

Tags:

• ubs
• economics
• andrew
• cates
• financial
• credit
• crisis
• markets
• interbank
• laending
• rates
• bad
• news
• equity
• commodity
• oil
• keynes