Tim Price, Partner and Director for PFP Wealth Management, joined Zak Mir, technical analyst for Zak’s Traders Café, on the Tip TV Finance Show to discuss the central banks and the ECB meeting from yesterday, as well as policy divergence and China.
Key Points:
Price noted that things are getting increasingly unhinged, partly due to the eroding credibility of central banks.
He continued that a pertinent question is whether QE is deflationary or not – and a growing number of people think that it is indeed deflationary.
In terms of the market, Price believed that slashing rates and more QE has created a zombified market – achieving stasis and that the market will struggle to clear out.
On 6 occasions in the last 50 years, when US and EU rates have diverged, half of these occasions have seen extreme financial and political turbulence.
Price finished by commenting that people have underestimated the China slowdown, with the great percentage of consumption of commodities shown by his slide showing that China is key for commodity prices falling.