Marc Ostwald – Market strategist at ADM Investor Services – joins Zak Mir and Bill Hubard in the Tip TV studio to discuss how China are tackling their growing debt and market losses; and where and when we’re likely to see the first move in interest rates.
Can you spend your way out of a bubble?
One of Chinas current goals is to make it into the IMF’s reserve currency basket, but first they must consolidate the Yuan, which has different valuations onshore vs offshore. They also have yet to tackle the multiple growing issues in their markets. Ostwald pointed out that Chinese debt is growing at a much faster rate than GDP (which has been slowing in recent years). Market pressures are still on Chinas stock market to head down, which reflects the global sentiment; however the authorities are still resorting to extremes in a bid to prevent a further fall.
Could the Bank of England move before the Fed?
Only a month ago, nobody would have backed the BoE to make their move on interest rates until the Federal Reserve had committed first. Now however, revised data from the US is slightly lower than initially thought, and UK data is looking much stronger says Ostwald. Despite this, Mark Carney is unable to make a call until after hearing from the FOMC next week.
