FE502 – 1015

PMI index

Purchasing Managers' Index (PMI)

• The Purchasing Managers Index (PMI) is a measure of the prevailing direction of economic trends in manufacturing.
• The PMI is based on a monthly survey of supply chain managers across 19 industries, covering both upstream and downstream activity.
• The value and movements in the PMI and its components can provide useful insight to business decision makers, market analysts, and investors, and is a leading indicator of overall economic activity in the U.S.

US monetary policy is the MP(Monetary policy) of the world

Gobal banking glut and Load Risk Premium

• Permissive financial conditions in the US accumulated Global current account imbalances and a global savings Glut. (Bernanke (2005))
• First, we will see that the US-dollar denominated assets of banks outside the United States are comparable in size to the total assets of the US commercial banking sector, peaking at over $10 trillion prior to the crisis.
• European global banks ?nanced their activities by tapping the wholesale funding market in the United States
• Foreign banks raise money in US then channeling the fund to the head office.