FRS Balance

Weekly wrap

20:00  April 16, 2020

МХ

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FRS Balance

Foto: Yandex

Period: April 11-16, 2020

2_20Key events

The key event of the week is the beginning of large-scale inflationary processes in the USA.

The growth rate of M2 over the period since the beginning of the year is about 16%. The previous record was in the mid-70s, that is, in the midst of the 3rd DCE crisis (DCE – Drop in Capital Efficiency, according to the methodology of the book «Remembering the Future. Ideas of modern economics») at the level of 15.1% of the annual growth of M2 (at that time inflation was about 12%).  The histogram (source: spydell.livejournal.com) reflects the period from the 1980s in modern methodology.  In April 1983, there was 14.3% of the annual increase in M2 (in the early 80s, inflation in the USA was 10-14%).

Macroeconomics

Business confidence in Australia collapsed to the bottom of the entire history of observations. Consumer sentiment is grim since February 1991.

3_13

In Japan, business confidence (Reuters review) in April was the worst since the fall of 2009.

4_10

The New York Federal Reserve Index is the weakest in all 19 years of observation. The Philadelphia Fed index is at the bottom since July 1980 and a step from the record low of 1974.

5_9

Industrial production in the United States fell by 5.4% per month, the manufacturing sector lost 6.3% - both are the worst since January 1946; annual falls were 5.5% and 6.6%, respectively (lows from October-November 2009).

6_4

Monthly retail in the USA in March fell by 8.7% per month (bottom for 30 years of observations) and 6.2% per year (minimum since September 2009). The weekly retail index (Redbook review) last week fell 8.3% per month (anti-record) and 2.0% per year (minimal since 2009).

7_4

The National Housing Association of the US Housing Market Index has been down since June 2012. The number of new buildings in the USA in March collapsed by 22.4% per month - the worst dynamics since 1984.

Initial applications for unemployment benefits in the United States are again huge (5.25 million), in just 4 weeks, nearly 22 million people lost their jobs. Repeated appeals are already 12 million - a historical record.

8_1

Layoffs in the private sector in Canada in March hit the record.

Foreign direct investment in China in March fell by 14.1% per annum, as a whole in January-March - by 10.8%. China's GDP in 1 quarter fell 9.8% per quarter (the first minus in history) and 6.8% per year (historical anti-record since 1992).

However, in March, the decline in key indicators (investment, production, retail) slowed, although not as actively as expected.

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