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By Jeremy Warner Economics Last updated: May 5th, 2011
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It’s all a bit worrying. Evidence of a sharp slowdown in both the European and world economies continues to mount. Earlier confidence that the global economy was strong enough to absorb moves by China and other emerging markets to tighten policy in the face of rising inflation are being increasingly questioned. Today alone, there’s been a whole clutch of indicators suggesting trouble on the way. Here’s a list of the top ten.
1. Jean-Claude Trichet, president of the European Central Bank, has put further rate rises on hold until at least July and dropped the phrase “strong vigilance” from the ECB’s news conference to explain the ECB’s policy decision.
2. Contrary to expectations as little as a month ago that the Bank of England would by now be taking the first tentative steps towards a policy tightening, the UK Monetary Policy Committee has again left rates on hold in the face of weak economic data. No-one now expects a rate rise until the Autumn at the earliest.
3. The Markit/CIPS headline services PMI index for the UK eased to 54.3 in April from 57.1, suggesting that the UK economy failed to pick up speed in April following its lack lustre performance in the first quarter.
4. German industrial orders fell unexpectedly in March, reflecting an unusually low number of large orders and suggesting that the country’s remarkable economic rebound may be past its peak.
5. World stock markets and the crude oil price took big hits on Thursday amid growing worries about the sustainability of the economic rebound.
6. The number of Americans filing for jobless aid rose to an eight month high last week. US productivity growth also slowed in the first quarter, backing up suggestions of a loss of momentum in US job creation.
7. US 10 year Treasury yields are down a further 4 basis points to 3.18pc, a five month low, despite Bernanke’s insistence that quantitative easing will cease in June. Anyone for QE3?
8. The price of silver fell a further 6.6 per cent on Thursday, taking its five day decline to nearly a quarter as investors continued to lose their appetite for risk.
9. Most other commodity prices are also under the cosh on fears that the boom has run its course, and the cycle is about to turn down again. Glencore seems to have got the timing of its IPO spot on, or perhaps just a tad too late.
10. Reflecting its traditional safe haven status, the yen has been the major gainer in currency markets, despite rumours that the Japanese authorities might soon take further action to halt its rise.
And that’s just for today! Is this just “sell in May” syndrome, or something more ominous? I guess we are about to find out.
Tags: Bank of England, commodity prices, European Central Bank, German industrial orders, Jean-Claude Trichet, pmi, silver, stock markets, US jobless, world economy
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