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Policy Action Kicks In As Bull Market Officially Ends

Various central banks are implementing emergency rate cuts to respond to the coronavirus and as the bull market ends. Meanwhile, it remains to be seen whether peak infections in China and South Korea are a light at the end of the tunnel.

 

Presented by: Wong Shou Ning, Lyn Mak, Julian Ng

 

 

The UK has launched a stimulus plan. Do you think the ECB will be pressured to do the same?

 

I’m sure they will. I don’t think they have that much power into interest rate cutting area – the rates are already right around zero. What they’ll most likely do: buy more government bonds, ease up on the reserve ratio, loan incentives, etc.

 

Europe is in a pretty bad position partly because COVID really attacks older people more aggressively than younger people, and the demographic profile of Europe is pretty terrible. So the ECB has to do something to help the economy. What they’re trying to do is to make sure the consumers don’t totally close their wallets and the banks don’t totally close lending. They’re really trying to stimulate banks to keep money moving.

 

 

In China and South Korea, there are indications that the infections have peaked. Pres. Xi visited Wuhan. Is this the light at the end of the tunnel?

 

I think it’s a natural progression and it’s quite possible that things are dissipating in China and things are improving. We see road traffic congestion gradually building back. That’s good for everybody. 2/3 recovered. We’re getting there. There may still be quite a lot of bounce back in March. Hopefully, in Q2, we’re back to an almost normal level.

 

 

Japan’s economy seems to be bordering on the recession. Do you think even the Bank of Japan has assisted on the current downward cycle? Have they got any more policy options left?

 

Central banks can do for the ending bull market. The BOJ really has been focused since 2012 on Abenomics to try to raise the inflation rate to 2%. They never achieved that. But they have helped some other things to stimulate the economy.

 

Japan’s in a very tough place because it’s tied to the Northeast Asian supply chain and it has the same demographic problem that Europe has. They really need to start circulating money. They can use these tools on reserve rates and loans, but how much further can they push it?

 

 

The fall in crude prices has also negatively affected shale oil producers. What’s your near and long-term outlook for the industry?

 

Shale for the US is energy security. Americans are tired of the political issues that they face in the Middle East to secure their energy supply chain. The current administration help the shale producers to survive including backing up their loans, working with banks to extend the payback period, etc. Shale is seen as a national asset by the current administration as they work very hard to make sure that those companies continue to be competitive and have the resources.

 

 

Listen to this podcast on the bull market at BFM: The Business Station.

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Podcasts

Has COVID-19 Exposed Over-Dependence on Chinese Manufacturing?

The Business Station Malaysia spoke to Tony about his insights from the Federal Reserve’s minutes released yesterday as well as his thoughts on Chinese manufacturing as activity slowly ramps up again. How long will it take for global supply chains to return to a sense of normalcy?

 

Beyond that, this podcast also get into Germany’s economy as weak economic data dragged down the Euro, and thoughts on whether we’ll see Asian Central Banks cut rates due to the Covid-19.

 

Listen to the podcast in BFM: The Business Station 89.9.

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Podcasts

Virus? What Virus? [Brexit’s impact, equities, coronavirus, etc.]

Brexit’s impact on the Sterling and tech stocks at nosebleed-highs are the subject of the day’s market discussion with Tony Nash, Founder and CEO of Complete Intelligence.

 

You forecasted that any loss in trade to be modest at best. Why do you say that?

 

“The nation tariff rate for non-EU member is something like 2.3%–2% on the price of anything is not going make a major difference. The trickier issue is the non-tariff barriers that Europe has. The UK has to navigate around those non-tariff barriers,” said Nash.

 

“In terms of country partners, the US is actually the largest trade partner of the UK. It’s around $67-68 billion a year. The second largest export partner in Germany at about $45 billion dollars. The EU as an aggregate partner is, of course, larger than the US. But the EU as a trade partner is stagnant. It’s not growing from the UK. It hasn’t grown noticeably since 2015/16. Meanwhile, the US is growing at a billion dollars per year.”

 

Where do you see the Pound this year?

 

“We’re seeing the Pound continuing to strengthen until about April. And once April hits, we see some of its strength tail off just a bit,” said Nash.

 

Listen to the Brexit’s impact podcast at BFM: The Business Station.

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News Articles

6% The Best China Can Do

As markets overnight were bolstered by concerns over a virus spreading from China, we speak to Tony Nash, CEO of Complete Intelligence, for his insight into the downgrade of China’s GDP forecast, the upside to US equities, and a fall in oil prices as a result of China’s coronavirus.

 

Presented by: Roshan Kanesan, Wong Shou Ning, Lyn Mak

 

Listen to the podcast from BFM: The Business Station. 

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Podcasts

On rate cuts: follow the leader

8 August 2019

We speak to Tony Nash, Chief Economist and CEO of Complete Intelligence, on the decisions of central banks of New Zealand, India and Thailand to cut interest rates, the PBOC’s motivation to set its reference rate for the yuan, and whether investors will be holding on to the greenback as a safe haven currency.

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Podcasts

Netflix’s Uphill Battle

18 July 2019

In the US, earnings season is well underway. Tony Nash comments on Netflix’s results. He also weighs in on the risks that US markets face in the second half of the year as well as the prospect of a rate cut by the US Federal Reserve.