The economic world is synchronising

It seems that the global economy is going through an interesting twist of events. We have been observing for years how after the crisis in the years 2008 and 2009, the world split apart. Asia barely noticed the crisis, America recovered soon but Europe couldn’t recover for a long time.

Only when it seemed that something is sort of getting better the bankruptcy of Greece hit and then the infection of Cyprus and others.

But now something is starting to change. Apart from some exceptions, Europe is also growing. Suddenly almost the entire world is growing.

That is getting confirmed by numbers that has been published today from Germany where the exports grow significantly faster than it was expected. It seems that the German economy is going to grow this year beyond all estimations. The growth of the German export is so fast that even the MFF is warning about it and suggesting Germany to increase the domestic investments so the German imports would grow and Germany wouldn’t be generating such a high trade surplus.

Everybody is afraid that if Germany has big surplus somebody else has to have a deficit which is creating an imbalance on the planet and potential problems to the future. That’s why many people are betting on the interest rates growing soon in Europe. But people are betting on the same thing in America as well anyway.

The Canadian central bank could start the global winding down of the monetary policy this week already. It is justifiably fearing that the average Canadian is indebted too much because of the all-time low interest rates. The debt of Canadian households has doubled in comparison with the year 2009. To keep the interest rates all-time low is dangerous. It could lead to the households getting overly indebted. But raising the interest rates is also dangerous because many people won’t suddenly have money for payments and it is going to start a recession and a rise of bankruptcies. That’s why the raising of the interest rates needs to be gradual.

That is changing the situation on the financial markets. Bond yields are going up all over the planet. The outlook of the dollar is not as good and clear as it used to be. On top of that, many people expected great things and changes of D. Trump. He hasn’t changed much in the economic area so far which might cause disappointment. That’s why we are expecting stagnation to a slight depreciation of the dollar for the majority of following month. The dollar is going to stay most of the time in the interval from 1.12 to 1.16 USD/EUR.