Is the 'Minsky moment' upon us?
Chief Investment Officer
In my latest Quarterly Outlook, I told readers that Q2 2018 marks 'the end of a cycle like no other', and the evidence supporting this view just keeps piling up.
From geopolitical conflagrations to de-dollatrisation, monopolies to credit impulse, the warning signs are all there: we are entering a period of markedly increased volatility.
At the centre of the conflagration lies the credit impulse. Ultimately, everything is about credit... and credit has stopped flowing. Beyond this key metric, we can also see that the profit impulse in the US is running in the negative – so two of three of the economy's key drivers are in sub-zero territory.
The price of money is rising, recession is coming, and negative credit impulse and yield curve readings represent confirmation of the trend.
For a look at some of the charts I consider to have the most explanatory power regarding this quarter and the coming storm, I invite you to download the recent presentation I made for South Africa's Sasfin.
Latest Market Insights
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.
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