For a change price volatility last week was subdued compared with other markets. Current instability in equity markets is high, with Japanese equities falling 26% in about 21 days, while it has taken 21 months for gold to fall a similar percentage. Welcome to our world, equity fans!
Market instability is an increasing feature, despite exchange stability funds everywhere trying to keep confidence going through interventions. At these times it is important to remember that this is why some gold ownership makes sense. If bond and equity market bubbles get pricked, which may be what’s happening before our eyes, it will be bad for banks, bad for consumer confidence and therefore bad for the economy. Or at least that is how central banks see things, which is what matters.
Here is the list of next week’s announcements.
Monday. Eurozone Labor Cost Index, Trade Balance. US Empire State Survey.
Tuesday. Japan Capacity Utilization, Industrial Production (Final). UK CPI, House Prices. US Building Permits, CPI, Housing Starts.
Wednesday. US Fed releases summary of economic projections. FOMC Fed Funds Rate.
Thursday. Eurozone Flash Composite PMI. UK Retail Sales, CBI Industrial Trends. US Initial Claims, Flash Manufacturing PMI, Existing Home Sales, Leading Indicator, Philadelphia Fed Survey.
Friday. Eurozone Current Account. UK Public Sector Borrowing.