In this series of posts we focus on various developments – some of which have been heavily advertised of late – under the lenses of our specific macro-financial framework.
By digging into their cause and effect relationships, the objective is to highlight the current market dynamics and formulate forward-looking scenarios.
We relate the fate of the current political deadlines to selected economic variables, more precisely the disconnect between growth expectations – which, we believe, were at the origin of some recent political successes throughout the world– and actual growth. By inverting the logic, we argue that the announcement of the snap elections in the UK may actually reflect the declining fortune of the British economy.
As George Magnus indicates in our next post, the timing of this political move is of particular interest. To figure out, we follow a real-time index of economic conditions developed by Bloomberg, ‘The Brexit Confidence Barometer‘.
The declining grip of political discontent in the US and the UK seems to be related to fading growth promises and expectations, a process that, in turn, is likely to influence financial conditions and the markets. Interestingly, the peak economic point of the post-Brexit era discussed in these lines seems to correspond to the peak public situation foreseen in our previous posts.
Will it lead to a peak market constellation?
In all cases we think that it underlines the advantages of going out of a rigid economic box by relating economic, public, social and financial variables.
Enjoy your read,