As equities showed some sign of a rally last week, Hamilton Howe’s Tokyo based Chief Economic Strategist presented her views and urged investors to maintain perspective as the global economy struggles to gain sustainable momentum.
“Although it was nice to finally see a week of equity gains, we are mindful that forces still exist that will have a huge say in whether the global economy is about to turn for the better. Naturally the price of oil is having an effect and further increases here will likely reduce systemic risk across the board. However we believe that the effects of recent political events, specifically the European migrant crisis and terrorist attacks, have yet to filter through the US and Asian economies.”
However as political and macro-economic issues play out, eyes at Hamilton Howe point towards the United States and the expected employment data release scheduled for the 1st April.
“The employment data release will tell us a lot with regards to how the US economy has weathered the first quarter of 2016. We expect the data to provide personal consumption and income data that will indicate a turn in economic fortunes as we go through Spring and into the Summer months. If the data is favourable, then we expect to see an instant reverse in investor sentiment, which will ripple through the equity markets during the next week.”
Whilst appearing bullish on the anticipation of positive employment data, Hamilton Howe’s Chief Economic Strategist continued as she prepared to balance her perspective to avoid investors jumping ahead unarmed with precision facts.
“Statements from the Federal Reserve however have not been as bullish as they perhaps could have been as they indicated an easing into lower potential growth rates even though the noise coming out of the Fed was that the economy is in a strong position. Reading between the lines of the Fed’s statements is difficult at this stage as their statements have been somewhat contradictory to say the least.”