Although this week was dominated by central bank decisions we also took some time to consider more quantitative and sectoral issues. Central banks matter, but not all macroeconomic variables weigh on the mind of investors equally.
The main news came from India‘s RBI‘s decision to lower its policy rate from 6.25% to 6%, the second since the start of the year. The decision was motivated by low inflation and took place over a background dominated by the upcoming parliamentary elections. At the beginning of the week, the RBA decided to continue to support the economy by leaving its policy rate unchanged. Our Figure of the Week, 108, comes from Australia. The end of March marked the 108th consecutive quarter of positive growth down under. We took the opportunity of the RBA meeting to review the conditions that have facilitated this Australian economic miracle.
More thematically, Ekonamik considered how economic variables affect the US Treasury market, and what it means to investors. We also considered recent reports that zombie corporates are still an issue to look at the multitude of figures floating around on this topic.
In labour markets, the USA’s BLS published labour market figures for March. While non-farm payrolls increase the unemployment rate remained unchanged. In our review of the labour market figures we discussed how the conflicting messages echo broader macroeconomic and financial confusion.
In political developments, we reviewed the results of Turkey‘s held municipal elections on the last day of March. The preliminary results suggested President Recep Tayyip Erdogan’s Justice and Development Party (AKP) had lost control of Istambul and Ankara, the country’s two major cities. Finally, the week concluded with the celebration of NATO’s 70th anniversary, which surprised analysts by US President Trump’s unusually conciliatory tone on the occasion.
