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ECB president Mario Draghi and a spate of data releases from IHS Markit on Monday painted an incredibly somber picture of the economic situation in the eurozone.
What they're saying: “Recent data and forward-looking indicators — such as new export orders in manufacturing — do not show convincing signs of a rebound in growth in the near future,” Draghi told the European Parliament’s Committee on Economic and Monetary Affairs.
What they're (really) saying: Phil Smith, an economist at IHS Markit, which compiles the reports on manufacturing and service sector activity, was far less kind.
Why it matters: The eurozone looks like it's headed for recession, if it isn't in one right now. And, as Draghi pointed out, there's little on the horizon that gives much hope for the future.
The big picture: The ECB has cut interest rates to -0.5% and will begin pumping around $22 billion a month into the economy through its bond buying program, but its president has used his last 2 public appearances to warn that it's not enough.
Between the lines: The data back up his point. The eurozone as a whole had its worst reading on manufacturing in 7 years in September while Germany's manufacturing sector showed its worst reading in a decade. The services sector is also starting to slip.
More than half of money managers think a global economic downturn is likely next year, a survey of 200 institutions that oversee $4.1 trillion in assets found.
Why it matters: “People have definitely bought into the bearish macro view,” said ASR's head of research David Bowers, according to the Financial Times. “When you look at the pattern over the past four or five years, it is definitely quite an important inflection point.”
Investors soured on emerging markets debt in the second quarter, data from trade association EMTA shows.
By the numbers: EM debt trading volumes fell to $1.211 trillion in Q2, down 12% from their Q1 levels and 9% lower than trading volumes in the second quarter of 2018.
What's happening: The decline is due largely to selling in local currency bonds, which have performed poorly as most EM currencies have struggled against the dollar so far this year, Eric Fine, managing director and portfolio manager at Van Eck, said in the report.
Turkey’s new central bank governor has cut the country's interest rates by 7.5 percentage points in the past 2 months and the Turks are behaving as if the country is headed for another bout of strong inflation.
The intrigue: The uncertainty in the country is growing such that supermarkets can't keep lids on their items.
What's happening: "As Turks hunker down for the winter, a time of higher food prices, they've traditionally turned to home canning to stretch the summer harvest, cooking vegetables and fruit and pickling them to stock up for the colder months," Bilgic writes.
What they're saying: "People think prices will surge in the winter, so they take precautions," Ibrahim Bilici, the owner of a dollar store, told Bilgic.
Add gold mining companies to the list of industries wary of spending in this economy.
What's happening: Gold prices rose to a 2-week high on Monday, as the awful manufacturing and growth numbers from the eurozone urged investors to buy safe-haven assets, and the commodity is again rising toward an all-time high. But gold mining companies are being cautious. WSJ's Alistair MacDonald writes...