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Old school indicator proves its value in 2016
Thursday 17 Nov 2016 Author: William Cain

Global money supply is expanding at its fastest rate since 2009, according to economist Simon Ward at asset manager Henderson.

Money supply was an indicator followed closely by analysts from the inflationary 1970s into the mid 2000s – until its relationship with economic growth appeared to break down. But the metric has been producing bullish signals on global growth all year – and it has been correct so far.

Ward says markets have until now appeared sceptical of the prospects for a strong global economic rebound. But, more recently, investors are starting to reposition portfolios into more cyclical areas of the stock market. Ward believes this trend has further to run.

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