Economic Snapshot – Sept-Oct 2015
September – October 2015 In summary
September was another difficult month for the global financial markets as calendar year 2015 reflects an eerie resemblance to 2014 with a strong first quarter, falling away towards the latter part of the year. A combination of concerns about a slowing world economy (connected to China) and uncertainty
about what the US Federal Reserve will do with interest rates drove a general sell-off in risk assets. These two issues appear to be dominating sentiment. However in pragmatic terms, economists continue to argue that the macro environment of the world’s economies is relatively healthy – But in terms of sentiment, markets are extremely sensitive to perceived bad news and they are not linked to economic output.
Financial markets were already nervous after August’s very poor performance and although data in September showing further improvement in the US household sector, other figures showing a slower pace of employment growth and manufacturing activity con tributed to underlying concern about the
US economy heading towards recession. Soft data about the Chinese manufacturing sector added to these fears even though there was more positive news from other parts of the economy.