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Realistbear

P I M C O Issue Upgrade On U S Gdp Growth

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http://www.telegraph.co.uk/finance/economics/8193077/Pimcos-Mohamed-El-Erian-predicts-higher-US-growth.html

Economics
Pimco's Mohamed El-Erian predicts higher US growth
Pimco boss Mohamed El-Erian upgraded his growth forecast for America on the same day 10-year yields hit a six-month high.
The chief executive of Pimco, which manages the world’s biggest bond fund, said on Thursday that he sees the US economy growing 3pc to 3.5pc in the fourth quarter of next year from the same period of this year.
“The US is using fiscal and monetary policy to try to attain escape velocity for the economy,” El-Erian told Bloomberg. “What we don’t know yet is whether that will be enough not just to change the economy’s trajectory for one year but to place it on a medium-term sustainable path. What the policy makers are doing is kicking the can down the road in response to the symptoms of the new normal [the changed state of the world economy after the recession], but they’re not yet changing the medium-term dynamics.”
Turning his attention to the EU, and expecting the euro area’s economy to grow by 0.5pc to 0.75pc next year, he said: “Europe is on a completely different track than the US. It is trying to achieve sustainable growth by getting its economic house in order through fiscal austerity.”
..../
The ECB is “basically providing liquidity support for a solvency issue,” El-Erian said.
“The question is whether the market will cooperate with that,” he added. “If it doesn’t, you will get disorderly restructurings in some peripheral countries and even more economic contraction.”
Meanwhile, US Treasuries rebounded. The 10-year yield fell five basis points to 3.22pc, extending declines after
stronger-than-estimated demand at an auction of 30-year debt.

This would normally be a sell on the $ and US bonds as PIMCO are a contrarian indicator given their sheer size and success rate. Or so the logic on here would seem to go. :rolleyes:

Whatever it may be, it boosted sterling a little along with the other strong set of bullish data on our growing trade gap.

Edited by Realistbear

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Pimco ......?

Oh drat!

I was just getting bullish the US myself.

Everyone duck, the nitroglycerine is out.

There is only one nation, it seems given present "data", that has missed out on the fiscal woes and it is the home of the Banksters. No one shits on their own doorstep do they?

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There is only one nation, it seems given present "data", that has missed out on the fiscal woes

Unlike the rest of the petro-economies...

1/ ... we haven't yet handcuffed ourselves to a zombie currency union

2/ ... we presently (and historically) prefer to fleece West Point (rather than enrage it)

For the UK's economy, there's only one datapoint that matters in this turn.

Brent futures.

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Unlike the rest of the petro-economies...

1/ ... we haven't yet handcuffed ourselves to a zombie currency union

2/ ... we presently (and historically) prefer to fleece West Point (rather than enrage it)

For the UK's economy, there's only one datapoint that matters in this turn.

Brent futures.

Are we still a petro-economy, given that we're now a net importer?

Peter.

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But, overall, if the price of oil goes up, our trade gap widens, and sterling is sold?

Are you describing a broad price increase across all energies or divergence off the broad trend in the Brent contract specifically?

The former reduces a few more on-shore producers (those at the margin) to rubble and demand moderates (the loss of value added exports tends to be offset by the price improvement and the effect on Sterling tends to be broadly neutral) - it's truly amazing how elastic domestic demand can be, when state-sanctioned slavery is permitted within any given Trade Organisation.

The latter tends to be broadly positive for Sterling.

A gradual drift (if any) toward renewable energy will probably require greater change to the structure of the UK economy than the add-liquidity strategy our reserve is presently using to loot our neighbours' tax revenues out at the ultralong end of the curve.

(I swear King resembles Drake more with each passing day)

Edited by ParticleMan

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Unlike the rest of the petro-economies...

1/ ... we haven't yet handcuffed ourselves to a zombie currency union

2/ ... we presently (and historically) prefer to fleece West Point (rather than enrage it)

For the UK's economy, there's only one datapoint that matters in this turn.

Brent futures.

What are Brent futures doing and what does it mean for the UK?

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What are Brent futures doing and what does it mean for the UK?

Maintaining relative value - nil change (economies which are expanding or contracting more quickly will continue to do so, and currency crosses, market rate differentials, and our ability to service our deficit will remain on the trajectories they presently enjoy modulo shocks to whichever counterparty is concerned in any given comparison).

Edited by ParticleMan

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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