Econoday Unplugged Unknown

After the recent round of central bank announcements, hopes are building that many tightening cycles may finally be nearing an end. However, with prices up around 30 percent since last June, the oil market could yet mean some unwelcome upside surprises in future inflation reports

Over the last couple of days, we’ve seen key interest rates hiked in the Eurozone, left on hold in the U.S. and cut in China. All of which means that the global economic outlook is as complicated as ever. The Econoday team pull it all together.

Taken together with the latest raft of central bank announcements, the recent deluge of real economy and inflation updates has given investors plenty to chew on. Here’s Econoday’s take on what it all means for the global economic outlook and financial markets

Recent interest rate hikes by several major central banks clearly underline the determination of the monetary authorities to get inflation back under control. However, for now, QT may have to run alongside central bank liquidity injections to reassure investors that another global financial crisis is not just around the corner.

Despite some generally hawkish central bank statements this week, financial markets apparently remain convinced that official interest rates will be falling before year-end. So, who’s right and does the disconnect matter? Terry Sheehan and Jeremy Hawkins discuss.

Market reaction to this month’s data underscores just how uncertain investors are about the global economic outlook. And this means that asset prices are likely to remain particularly sensitive to the higher frequency data, at least until the picture becomes clearer.