Making the economy more durable

Posted by: Paul Donovan

25 Sep 2020

Daily update

  • US durable goods orders data is due. This is a split statistic. We know US consumers, after a lockdown spent watching home makeover shows, have rushed to refurnish their houses and spend accumulated savings on consumer durable goods. On the other hand, an economist toiling at home using their own desk, computer equipment and log-burning stove removes the need for their employer to invest in capital equipment.
  • Eurozone M3 money supply is due, and of course at the moment is growing noticeably faster than the Eurozone economy. Sadly, there is no single money demand number that can be produced alongside the supply data. We know, however, that very little of the liquidity produced by central banks is held outside central banks.
  • A worldwide day of climate change protests is scheduled, with a school strike being called. The pandemic has accelerated structural change, including the changes related to the environmental credit crunch.  People are more sensitive to food waste (hence the surge in banana bread baking), and changed working and consumption patterns are more environmentally friendly. Plus, every fiscal package is tinted green with environmental projects.
  • Turkey's central bank unexpectedly raised interest rates yesterday, citing inflation expectations and following a period of some weakness for the lira.

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