Global Growth Expected


    Rising equity prices are signaling better times ahead for investors, but firmer global growth will depend on central banks keeping interest rates steady in 2014, says a report from CIBC World Markets Inc. “Equity markets are sensing it and this time, they’re right. Global growth should finally surprise on the high side in 2014,” says Avery Shenfeld, chief economist at CIBC. “A year of four per cent global growth is hardly spectacular, but will be a point faster than 2013 and a half-point above the last IMF forecast. “Typically, upside surprises in growth bring higher bond yields. But the causation also goes the other way: at a still-fragile point in the cycle, easy monetary policy is a necessary condition for growth to accelerate. Central bankers in North America, Europe, and Japan are, each in their own way, going to ask markets to give low rates a chance.”