Daily update
Daily update
- China’s Economic Work Conference hinted at more economic stimulus in 2023. This may be necessary. Fear of COVID may be increasing. Official control of reporting on the subject downplays the virus, but that encourages rumors which may exaggerate fear of the virus (which is where the economic damage is done).
- The US is trying to slow rather than stimulate its economy. This should be apparent in the NAHB house price index. Housing is one of the more interest rate sensitive parts of the US economy, and Fed Chair Powell’s relentless cry of “hike, hike, hike” has not helped the sector. This is not 2008—the cash-out mortgage refinance pattern has not been repeated, so spending power of existing homeowners is not affected. The construction sector, and those employed in construction, are hit.
- The UK and Germany offer business sentiment opinion polls. The media narrative has not generally been that positive, and this tends to hurt sentiment. Economic growth reality has tended to outperform sentiment, especially in revised data.
- European ministers get together to argue about a gas price cap for the EU. The latest proposal is for a lower price cap—but one that would not be imposed if supplies were threatened or demand reduction policies were undermined.
