Negative interest rates

Wealthy Nations Daily Update - Negative Rates

Mario Draghi recently stated the “downside risks have increased again” and “in this environment, euro area inflation dynamics also continue to be weaker than expected. It will therefore be necessary to review and possibly reconsider our monetary policy stance at our next meeting in early March, when the new staff macroeconomic projections become available.”

Wealthy Nations Daily Update - Non-Farm Payrolls

Jobs growth has been one of the strongest data points on the US economy, although we are now questioning whether the weakness seen in the recent data points, particularly the manufacturing sector, is starting to spread to other areas of the economy.  This has been evident in broad based indicators such as the Chicago Fed National Activity Index, a composite of 85 monthly indicators where a positive/negative reading corresponds to growth above/below trend, which has remained weak with the December reading at -0.22 and the prior reading revised down to -0.36.  While it is not yet at levels indicating a recession it suggests this risk is rising.  Even the services sector has started to show some signs of slowdown; earlier this week the January ISM non-manufacturing fell to 52.1 which was the weakest reading since February 2014.      

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