https://www.marketwatch.com/story/catastrophically-bad-inflation-report-is-boosting-chances-of-a-75-basis-point-hike-in-june-or-july-11654876860
- Equities are selling off again with a lot of macro data points to digest ahead of CPI later today in US.
- China’s Covid situation is regressing.
- The hawkish pivot from several central banks this week triggering rates higher & stock markets lower is causing a negative feedback loop amongst other global markets.
- As earlier predicted, the increasing number of corporate profit warnings is up, as inventories swell.
- I did say earlier inventories build up will happen as inflation prolongs...as they tend not to age well.
- With monetary policy feeding lower growth expectations, there is a degree of circularity stagflation concerns building as central banks continue surprising to the hawkish side with no end in sight until inflation moves more convincingly towards the target.
- Indeed, this week highlights a broader point about central banks’ implicit comfort in accepting lower asset prices....and that dear readers, is called disinflation.
What does it all mean? ☝️
It takes roughly 4 - 7 months b4 effects on CPI (consumerism) is felt by exporting nations...
By end year locally, we will be in stormier political and economic waters than now unfortunately; in so much as lower liquidity, increasing supply chain disruption, weaker ringgit & more global geopolitical tensions effects inventories and rising prices....causing the citizenry to be angry at leadership for their discomforts.
Watch closely countries Central Banks and monetary policy changes as these changes will throw a monkeys spanner into growth projections and investments into countries
....which effect job growth and injects fear factors into analysis
...which means Business owners as usual will be over exagerating price increases and this will show in Producer Price Index thus _increasing risk factors_ to retail price controls
....which means countries with large subsidies will see huge cost increases in subsidies
....which will mean further _controlled lowered currency_ to increase export price competition and thus help accelerate taxation collection from exporters!
Yang suffers as usual will be the savings value/rate and retirement funds of individual citizens as their money buys lesser goods.
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