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Weekly Economic Commentary

Weekly Economic Commentary

Categories: General, General

There are two certainties in life - death and taxes. Apparently, we can now add a third – a US rate hike in December.

The Bloomberg futures indicator now reports that markets are at a 100% probability for a US rate hike next month (not 98% or even 99% – and in the world we live in, surely there should be some small chance that something could yet happen to delay this move? Apparently not). In addition, markets are now putting decent odds on a follow-up move by June 2017.

This is in contrast to our market which continues to price in a slight rate increase in the official cash rate over the next 12 months, which would be the first rise since late 2014.

This week’s chart

How about building another Great Wall in Asia out of paper? India's grappling with what to do with 23 billion bank notes that will soon be worthless following the government's crackdown on black money. The pile would be 300 times the height of Mount Everest stacked up or long enough to reach the moon and back five times. While most will be destroyed and dumped in landfills, some will be turned into briquettes or converted into paperweights and other knick-knacks. What, no toilet paper? This week’s chart of the week discusses the problem in India.

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Source: Rural Bank


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