Asset Prices Sending Message that World is Getting More Disinflationary, not Less So

August 06, 2015
By Bryce Coward, CFA in Economy, Markets

With the MSCI Emerging Markets Index now down 15% from its recent high and WTI crude oil down some 26% from its recent high, both series are at a critical juncture testing important lows that, if broken, could open the door for a much larger decline. We also remind readers that copper has continued its long-term rerating of late.

The reason we point this out is that we believe them all to be linked to a certain extent to the slowing China/global growth meme. Indeed, all three are highly sensitive to the growth/inflation and liquidity environment and all sending the same message that the world is becoming more disinflationary, not less.

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