Richard Cayne Meyer – The International Monetary Fund (IMF) has issued a series of recommendations for international reform that could boost the size of the global economy by $2.25tn. The ‘Global Prospects and Policy Challenges’ report from the IMF arrives shortly before G20 finance ministers are due to meet this weekend in Australia.
The IMF calls for an extensive range of changes to be made across the global economy including reform of product and labor markets, political reform, increased competitiveness in some European economies and infrastructure investment.
The report estimates that when combined these efforts could add $2.25tn to the global economy by 2018.
In particular the IMF highlights that attempting to rebalance and reform product and labor markets as well as increasing infrastructure investment could boost global growth by 0.5% each year comments Richard Cayne Meyer.
Richard Cayne Meyer comments that Japan’s monthly trade deficit has more than doubled to a new record after a weakened currency drove up the cost of fuel imports, while exports slowed.
Japan’s trade gap rose by 71% to 2.79tn yen ($27.3bn; £16.4bn) in January from a deficit of 1.3tn yen in December.This comes after imports rose by 25%, outweighing a 9.5% rise in exports.
Japan has posted large trade deficits for 19 straight months, raising concerns the government’s stimulus policy may be having a counter effect.
Prime Minister Shinzo Abe has been looking to weaken the value of Japan’s currency to stimulate economic growth and end nearly two decades of deflation.
His measures, which have come to be known as “Abenomics”, include increasing the money supply in Japan to drive down the value of the currency explains Richard Cayne in Bangkok Thailand.
The U.S. Federal Reserve intends to continue reducing economic stimulus measures, minutes of the central bank’s January meeting have confirmed.
The Fed’s policy makers said they expected to cut monthly bond-buying in predictable $10bn steps, which nowstands at $65bn at the end of its most recent meeting in January.
That came despite a string of disappointing U.S. economic data, including weak jobs figures. The bond purchasing program is intended to keep interest rates low and stimulate growth explains Richard Cayne Meyer.
Business growth in the Eurozone eased this month but the bloc’s economy continued to expand at a “robust pace”, a closely watched survey suggests.The latest Market Eurozone compositepurchasing managers’ index (PMI) dipped to 52.7 from 52.9 in January. A figure above 50 indicates expansion.Within the bloc, Germany and France continued to see contrasting fortunes.
German companies saw strong growth, but activity among French firms declined for the fourth month in a row notes Richard Cayne Meyer Asset Management Ltd.
Meanwhile, shares across Asia fell on Thursday after the latest Chinese manufacturing data came in at a seven-month low.The reading of HSBC’s preliminary manufacturing purchasing managers index for February was 48.3, down from 49.5 in the previous month. A score below 50 indicates a contraction in factory activity.
As a result, Hong Kong’s Hang Seng index slid 1.1% to 22,412, while the news also affected the Australian dollar and the Japanese yen.
Global fund managers have taken their exposure to banks to record levels, while continuing to scale back their weightings to global emerging markets.
The Bank of America Merrill Lynch Fund Manager Survey for February shows a net 28% of asset allocators now have an overweight to banks – up from just 16% in the previous month.
Richard Cayne Meyer comments that this means the allocation to global banks has reached a record high, with the overweight sitting at 2.4 standard deviations above its 10-year average.
BofA ML says: “In the wake of the global financial crisis, banks were unloved and GEM were portfolio darlings. The reversal in sentiment between these two investments appears complete this month.”
The survey shows a net 29% of fund managers are now underweight global emerging markets – almost double the net 15% underweight seen in the previous month.
Richard Cayne Meyer born in Montreal, Quebec Canada resides in Bangkok Thailand and runs the Meyer Group of Companies www.meyerjapan.com. Prior to which he was residing in Tokyo Japan for over 15 years and is currently CEO of Asia Wealth Group Holdings Ltd a London, UK Stock Exchange listed Financial Holdings Company. Richard Cayne has been involved in the wealth management space in Tokyo Japan and has assisted many High Net worth Japanese families create innovative international tax and wealth management planning solutions. http://www.isdx.com/Asia Wealth Group.