Investment Markets Overview — W/E 5th September 2014

They say that it’s a sign of madness repeating the same thing again and again, despite it not working, and that’s just what the ECB President, “Super Mario” Draghi did this week. In a desperate attempt to re-flate Europe, by slashing the Euro-Zone’s main refinancing rate by 66% from 0.15% to 0.05%, smacks of both desperation and panic, he has effectively repeated his “answer” to the Zone’s de-flationary bias of the past few years, despite continued falling inflation, dormant economic growth and little demand to borrow or lend. Furthermore, the amount charged to banks, to deposit cash via the ECB deposit facility rate, was doubled from 0.1% to 0.2%, despite very little result from the 0.1% introduction of only June this year, as some crack-pot attempt to force banks to lend. A well known editor of a well know financial publication, who will remain anonymous to save blushes, observed, “Draghi’s not daft and whilst he may not admit that he’s targeting the exchange rate, he is,” going on to say, “a weaker currency can help a lot. Britain avoided deflation in the last few years mainly by crushing the pound via quantitative easing (QE). Whilst we wouldn’t disagree that Draghi’s objective is to devalue the Euro, as the UK, the US and Japan are also trying to do, we show an interesting chart with supporting comment under the E-Z section below that states the facts, not fiction.

5 Sept 14

Subscribe to the Full Investment Markets Overview Newsletter which contains the following:-

Additional Commentaries:
•US economic data . . .
•Euro-Zone . . .
•The UK . . .
•Out East . . .
•The $US index . . .
•Within the commodities complex . . .
•Economic data due next week includes . . .

So, unable to inflate by liquidity creating operations alone, Draghi has kow-towed to “QE” but in a devious manner …..

Charts:
1.Indices Weekly
2.US NFP V US Private Sector Jobs
3.UK QE V UK CPI and £/$US
4.OZ Retail Sales V OZ GDP
5.Commodity 1 Week Moves

Table:

13 Indices, 11 columns of detailed information, for accurate analysis

Wisdom comes from hindsight, not the actual act of falling on your face

Click Here to view Details of the full version of this Newsletter which includes full text and detailed Charts for each section

 

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