Saturday, 14 January 2012

Price Inflation and the Impact on Equities

ASX S&P200 (XJO) versus price inflation gauge

Given that we are in a global environment where many countries have almost zero interest rates, it is the price inflation flows that have a substantial impact on equity market trends. This structure is likely to last for an extended period and therefore this is a very important indicator to watch.

It appears that we are entering in to a new positive environment for equities providing an upwards bias on prices.

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