A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.



EZ FIG at New Low

Euro zone inflation pressures hit a new low in March, driven by disinflation in Germany, France and Italy, according to a barometer that attempts to predict cyclical turns. The New York-based Economic Cycle Research Institute said on Friday its future euro zone inflation gauge fell to 84.6 in March from 86.3 in February.

The comparable UK measure, however, held steady at 99.5. Official euro zone inflation was just 0.6 percent in April, well below the European Central Bank's preferred 2.0 percent ceiling, and many analysts are bracing for it to turn negative in coming months. The ECB cut interest rates to a new low of 1.0 percent on Thursday, as expected, but launched a programme to purchase 60 billion euros worth of covered bonds.