Disinflation abounds

Tuesday 11 November 2008 - Disinflation abounds Presented by Paul Donovan + Disinflation pressures abound, with the UK BRC retail sales coming in devastatingly weak (-2.2% yoy in October) and the consortium suggesting aggressive price discounting will follow. This follows from the deflation of UK producer prices. + Australian business confidence has slumped. This may be correlated to the performance of the Australian cricket team (which has also slumped), but is more likely a consequence of the global crisis. The weakness of forward orders suggests sluggish global demand. + The problems of the global banking system now include the problems of the American Express credit card group. The Fed gave permission for the company to become a bank holding company yesterday (which gives it access to Fed emergency lending etc). + The head of the PBoC, Zhou, commented that he could not rule out a depreciation of the Chinese renminbi in order to boost exports. We must hope that this is an instance of obscure central bank humour. The US is unlikely to react well to such an idea.

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YouTube | November 11, 2008

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