Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. These days I'm retired, and I can't by law give you advice. While I do make mistakes, I try hard to do my analysis thoroughly, and to make sure my data are correct (old habits die hard!) Also, don't ask me why I called it "Volewica". It's too late, now.

BTW, clicking on most charts will produce the original-sized, i.e., bigger version.

Friday, March 9, 2012

Brazil ready to start growing again

The chart below shows the central bank discount rate and the year-on-year change in industrial production for Brazil.  The bank rate is plotted on an inverted scale, so a fall on the chart means that interest rates are rising.  As you'd expect changes in the bank rate are followed with a lag by changes in industrial production.

My guess is that the Brazilian economy is bottoming right now, an impression confirmed by the recent rises in the HSBC/Markit PMI indices.  Meanwhile, US employment data are out overnight.  So far, the numbers have been better than expected and previous data have been revised better.  Usually a good sign.

Just as well, as Europe looks very sick (more on that later).

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