Market turbulence – effect or cause?
By
👤Erste Group
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Week Ahead
The publication of the ISM index for December showed the effects of the financial market turbulence. This most important indicator for US industry fell sharply, albeit from historically very high levels. The question is how strong the economic slowdown will be in the US in 2019, but also globally. Nobody should be surprised that economic growth in the current year will slow down compared to the previous year 2017 – and 2018 for the US – were economically outstanding years, but these growth rates were not sustainable. The open question, however, is how severe the growth downturn will be. Towards the end of last year, an opinion in this regard was formed on the markets that was not consistent with the data situation. To make this statement, we are not using our assessment, but that of the two most important central banks. In December, the ECB president described the assessment with continued confidence, but with growing caution. Just under a week before Christmas, the US Fed had raised interest rates, and, combined with a positive assessment of the economy, indicated further interest rate hikes for 2019, which threw the markets into turmoil
By
👤Erste Group
