The negative sentiment prompted by the slide in the renminbi has been compounded by further weakness in Chinese equities and another soft reading of the country’s manufacturing PMI. What’s more, falling industrial commodity prices are feeding back into growing concerns about the health of the global economy, despite the resilience of the PMIs elsewhere and the boost that cheaper oil in particular should provide to growth. Indeed, at face value the plunge in commodity prices over the last year is consistent with a global recession as severe as that in 2008-09. We think that this negativity is overdone, although the recovery in the price of gold does at least vindicate our optimism about the medium-term prospects for the precious metal.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services