Week in FX Europe – German Growth Concerns Rise As European Engine Stalls

• German ZEW Drops into Negative Territory


• UK Inflation drops to 1.5%


• BoE Chief Economist gloomier about UK Economy

Germany’s ZEW Institute released its monthly survey falling into negative territory. The financial analysts who participate are not optimistic and could hint an upcoming contraction in the third quarter. The EUR/USD was trading below 1.27 and expected to head lower awaiting US retail sales. What happened next could very well define what colour ink do investors use to describe 2014. A weaker than expected US retail sales figures spooked investors into a sell off that saw the EUR/USD pair break above 1.28 as safe haven flows took over and European bond yields went their own way. German bunds were favoured, but Spanish, Italian and Greek debt came very close to crisis levels.

It took strong corporate earnings and strong US employment and housing data to reverse the trend before the end of the week. Questions remain about how deep is the economic malaise in Germany. There is no denying that the economic fundamentals of the nation are strong, but as it faces a stand off with the rest of Europe over austerity, it is hard to see how Europe as a whole can break away from stagnation.

The Bank of England was proving the be the only central bank that could be counted along with the US Federal Reserve for a possible rate hike in 2014. Now that seems to be out of the table as global economic conditions have worsened and growth forecasts cut. The UK inflation fell to 1.2%, a five year low, making very unlikely that the BOE will raise rates this year. To make the matter more clear the Bank’s Chief Economist is saying he has changed his mind on when to hike. He described a “gloomier” outlook on the economy given the latest inflation figures. A Reuters poll still finds high probability of a first quarter hike next year amongst analysts.

Next week in Europe

The drop in US retail sales along other geopolitical events trigged a wave of uncertainty across the globe. Stock markets and emerging market currencies were the biggest losers as the US economy was thought to be slowing down. The last two days of the week calmed investor’s nerves as earning reports were solid as well as housing and employment indicators out of the US.

Next week has two major trends: Central banks and PMIs. The Reserve Bank of Australia releases its minutes on Tuesday. The Bank of England will also release the minutes from its rate setting meeting two weeks ago on Wednesday . Given that the BOE’s chief economist has cooled expectations of a rate hike this year there will be little surprise in the minutes. The Bank of Canada will announce its benchmark rate. No change is expected given the mixed economic data and employment data confusion.

The flash manufacturing purchasing manager’s index PMI is a survey of manager to gauge their optimism regarding business conditions going forward. HSBC for China and Markit for the rest of the world are the firms that have compiled the early draft of the data and will release it starting with China and the schedule will move around the world given insights into the state of the global economy.

Fore more market moving events visit the MarketPulse Economic Calendar

WEEK AHEAD

* CNY Gross Domestic Product

* AUD Consumer Prices Index

* GBP BOE Minutes

* USD Consumer Price Index

* CAD Bank of Canada Rate Decision

* CNY Flash PMI

* EUR French, Spanish, German and European Flash PMIs

* USD US Flash PMI

* NZD Consumer Prices Index

* GBP Gross Domestic Product

MarketPulse

The post Week in FX Europe – German Growth Concerns Rise As European Engine Stalls appeared first on FX FOREX.

via WordPress http://ift.tt/1rMEtVF



Forex, concerns, engine, europe, european, german, growth, Rise, Stalls, week

The opportunity cost of early retirement

via Early Retirement Extreme:

Adolescents have a sense of die-hard immortality that comes from having given no thought to their future. I realized that I wasn’t immortal when I was 21-22. This implied the full realization that my life span was finite although I hadn’t yet reached the sense of time that I have not that “old” people frequently demonstrate when they talk of children with the statement that “they grow up so fast!”.

Being an intellectual (MBTI type NT – rational) I measure growth in terms of how much I know or how competent I am. It was around that age that I found out that I was starting to forget things that I have learned as my brain was making room for new things and cutting away “excess useless knowledge”. I prefer to liken this to the growth of an ecosystem or a society where weeds (suburbs) are replaced by bushes (suburbs with shops) and finally trees. Weeds are like information. Bushes are like knowledge and trees are the wisdom that remains of what went before.

Having lived a good part of my life already, I can start mapping out choices or what-ifs. For instance, the opportunity to excusably engage in idiotic behavior while being drunk is long gone (I’m told that after the age of 25 one is not so easily forgiven). The opportunity to compete in sports on a regional level is also going soon. Were I to start now, I would not have been able to put in the time until I was maybe 45 at which point I would be too old for most sports.

Early retirement provides both opportunity and opportunity costs, but of course so does a career. For instance, quitting a career that for many people were chosen by the 18 year old selves allows a reinvention of who they are — if people indeed are defined by what they get paid for as seems to be the case in our modern world. On the other hand it also prevents them from becoming what they could have become. For instance, my 18 year old self wanted to become a professor in order to discover amazing new things and teach them to enthusiastic students. Needless to say, my 32 year old self has fewer illusions about the whole deal. Still there are some [illusions] left and it is such hope that would cause a lot of what-if doubts were I to retire now. However, since I have possibly irreversibly polluted my mind with thoughts about what else I could be doing, I entertain an equivalent number of what-if doubts were I not to retire now. This would not be a problem if I were held down by a children, mortgage, debt, and other liabilities. In some sense such restrictions would be welcomed because they would remove the uncertainty and the need to make decisions. Perhaps this is why so many people choose them.

For more info: The opportunity cost of early retirement

Early Retirement Extreme

The opportunity cost of early retirement

The post The opportunity cost of early retirement appeared first on FX FOREX.

via WordPress http://www.evvi.net/4110/personal-finance/the-opportunity-cost-of-early-retirement.html



Personal Finance, adolescent, adolescents, bushes, early retirement, ecosystem, growth, immortal, measure, opportunity cost, professor, trees, weeds