European data – numbers that matter
0Next week, we’re due Final GDP data for France (due Tuesday), which looks likely to remain unchanged from its provisional estimates of 1.6% YoY. Euroland money supply figures for November are then due on Thursday. We expect a marginal fall to 2.4% YoY (from 2.6%) and the 3 month average to 2.7% (from 2.8%) in October.
In the UK, December Nationwide house prices (due Wednesday) look likely to fall to 1.5% YoY from 1.7% in November. PMI services for December, due on the 5th of Jan, are likely to improve marginally to 52.2 from 52.1 previously.
These growth numbers really matter – we’re now four and a half years into a global deleveraging which will most likely continue for years, probably decades, until debts and debt service are brought back into line with incomes and asset values.
In this difficult environment the low level of economic activity, slow growth rates, weak credit growth and tight liquidity challenge the survivability of companies and have big impacts on the relative performance of asset classes.
Japan has been going through this for 20+ years now and provides a case study of what types of companies survived or failed and what types of assets did well or poorly through this multi-decade deleveraging.
James Bevan is chief investment officer of CCLA, specialist fund manager for charities and the public sector. CCLA launched The Public Sector Deposit Fund in 2011 to meet the needs of local authorities and other public sector organisations. You can follow James on twitter @jamesbevan_ccla