Before the epidemic of the NCV the rates recorded a modest upside, in direct connection with a reassurance of the prospects of the world economy after the China-US semi-agreement on tariffs. But the "yellow swan" of the Chinese epidemic and the risk of spillovers beyond China's borders has drastically changed the direction of interest rates around the world. The central banks of Thailand and the Philippines have lowered rates in recent days, following further declines in January in Brazil, Malaysia, Turkey and South Africa. The Chinese one has injected copious liquidity. Only the Czech Republic goes against the tide. According to data from the Bank for International Settlements (Bri), in January the median level of interest rates in emerging economies for the first time it "laundered" 3%, and stands at 2,75%.
in advanced economies there have been no changes in the key rates, but clearly the concern of central bankers (and not only them!) turns to the slowdown in demand which will require monetary policy postures more expansivedespite them.
All this while a major rethinking is underway for central banks on how to deal with - but here we are talking about structural problems - a possible change in the inflation target and, above all, what to do with the "green swan" (see the cover of the latest report of the BIS) on climate change.
I taxi-guide, it has been said, have not changed for the advanced countries, but i market rates Yes. On 10-year government bonds, the drop, since January 10, has been 15-25 basis points for Germany and the USA, and much stronger (almost half a point) for Italy, although in the latter case the primum movens it has nothing to do with swans but with the support given to the stability of the government by the outcome of the elections in Emilia-Romagna. Applying the latest data on inflation dynamics to nominal rates, also i real rates appear to be declining, but once inflation registers the fall in oil prices and the very predictable weakness in demand, real rates may appear flat.
On the financial markets their, which usually pounces like a vulture on the world's woes, has only rallied slightly (approximately 3%) since the beginning of January. The other good-haven – the dollar – is also strengthening, below the 1.10 level against the euro. There chinese coin is more controlled with respect to the dollar-euro exchange rate, but has nonetheless weakened – as was to be expected – with respect to the levels of appreciation reached in mid-January (6,86 against the dollar, after the signing of "phase 1" of the trade agreement with the USA) and is climbing towards 7.
I stock markets, on both sides of the Atlantic and in Japan, show inexhaustible stability (if not an increase, as on Wall Street), compared to the levels at the beginning of the year. Only in China has there been a decline. Outside the Celestial Empire quotes seem convinced that they will not be infected with the Chinese virus. Or maybe they reflect the belief that there are no alternatives to saving in the era of ultra-low rates. Congratulations.
