Macro Pulse

This week’s decision by the Fed to lower its key policy rate by 50bps was widely - but not universally - expected in financial markets. Still, the initial market response to this decision suggested that investors could be uncertain about what it implies for the economic outlook. In our charts this week we drill into the following factors: ·      The US yield curve ·      Global growth and inflatio...

The ECB’s decision to lower its key policy rates by 25 basis points this week, while widely anticipated, underscores a shift in focus, with central banks now prioritizing economic growth. This marks a departure from the post-pandemic period when monetary policy had been calibrated to curb inflation. In our charts this week we take a closer look at the global inflation scene. In particular we home...

With the summer vacation season now over in the Northern Hemisphere our charts this week shed light on recent and prospective developments in the world economy. More specifically we look at the following: ·       The global policy rate consensus ·       Inflation surprises and oil prices ·       The global business cycle ·       China’s excess capacity ·       Japan’s carry trade ·       US moneta...

Financial markets have remained in much calmer waters in recent weeks following the bout of volatility that earmarked the first week of August. That’s partly thanks to the release of some reassuring inflation data together with some dovish signals from several central banks. However, concerns about the global growth outlook persist. In our charts this week we focus on: ·         Copper prices and...

Some stability has returned to financial markets over the past few days thanks to some inflation-friendly economic data, some dovish signals from several central banks, and most notably the Bank of Japan, together with some upbeat corporate earnings news. That said, heightened geopolitical tensions are keeping investors anxious. Uncertainty is additionally being amplified by the potential for some...

Financial market instability has been in the ascendancy for much of the past few days as investors shunned risk assets and flocked to safe havens such as government bonds. A key catalyst was last Friday’s weaker-than-expected US employment report but there have been other factors - such as the BoJ’s monetary policy - that have amplified investor concerns. In our charts this week we home in on: ·  ...

Monetary policy normalisation has been a big theme over the past few days and, insofar as this signals that inflation is also returning to more normal levels, this ought to have been welcomed by global investors. Most importantly the Fed has signalled a high likelihood that it will cut its policy rate at its next scheduled meeting in September and, in doing so, kick start an easing cycle. In our c...

Politics has continued to dominate the headlines in recent days and will doubtless remain a big focus in the immediate weeks ahead. In the background, however, incoming data have suggested the outlook for the world economy has been darkening probably because more restrictive policy settings are now more forcibly weighing on aggregate demand. In our charts this week we focus on: ·         Markets a...

Markets have become increasingly optimistic this week about a potential interest rate cut by the Federal Reserve in September following some dovish remarks from Fed Chair Powell. Meanwhile, the IMF has maintained that the outlook for the world economy remains broadly balanced, a message that chimes too with the latest Blue Chip survey of economic forecasters. In our charts this week we focus on: ·...

A soft landing scenario for the world economy, driven by moderating global growth, and aided by disinflationary pressures, has remained the base case in financial markets in recent weeks. But investors have also been dancing to some political music in the US and Europe in recent days. In our charts this week we focus on: ·       The policy rate consensus ·       The US labour market ·       Euro a...

Growing concern about the economic ramifications from France’s upcoming election have been weighing on risk appetite in European financial markets in recent weeks. But the outlook for the broader world economy has also been arguably taking a turn for the worse. In our charts this week we look at: ·       European financial stress ·       European and global growth surprises ·       Global growth m...

Soft landing narratives have remained in vogue in financial markets in recent weeks, partly due to weaker-than-expected US inflation data. In contrast, this week’s stronger-than-expected UK service sector CPI inflation data unsettled investors and probably played a role in the Bank of England's decision to keep interest rates unchanged. In our charts this week we home in on: ·       US inflation s...

A debate about the precise timing of a Fed rate cut has continued to dominate financial market sentiment in recent days. A nod from the Fed acknowledging progress in fighting inflation, coupled with weaker-than-expected CPI data, has, in particular, kept hopes of a soft landing for the US economy alive. In our charts this week we focus on: ·       US inflation ·       The UK economy ·       Consen...

A further batch of disappointing US growth data, coupled with policy rate cuts from the Bank of Canada and the European Central Bank, have continued to re-energize easing narratives in financial markets over the past few days. But politics has also been grabbing the headlines thanks to some unexpected election results from e.g. India and South Africa. In our charts this week we delve into: ·      ...

Expectations about when exactly central banks will begin an easing cycle have remained a dominant driver of financial market trends in recent weeks. But in the background to this, heightened enthusiasm for the rollout of Artificial Intelligence infrastructure, reinforced by stellar corporate earnings reports, have additionally contributed to an upbeat mood. In our charts this week we home in on th...

In the absence of top-tier economic data, corporate earnings reports, particularly from the technology sector, have played a big role in shaping financial market sentiment over the past few days. In our charts this week we home in on: ·         South Korean trade ·         European policy uncertainty ·         US and UK data surprises ·         UK inflation ·         Copper prices ·         Renewa...

A Fed easing narrative has been re-energized over the past few days largely thanks to a slightly weaker than expected US CPI report this week but, more generally, because of a battery of weaker-than-expected US data over the past couple of weeks. In our charts this week we examine the following: ·       Consensus growth expectations for 2024 ·       GDP growth in advanced economies in  Q1 ·      ...

Last week's softer-than-expected US data releases have sparked renewed hopes that the Federal Reserve may initiate an easing cycle in the coming months, and, in doing so, have reignited investors' appetite for risk. This week, our charts explore the following: ·       The US economic outlook ·       US momentum versus RoW momentum ·       Global inflation surprises ·       Oil and US yields ·    ...

Lingering concerns about the US Fed's inclination to lower interest rates in coming months have continued to unsettle financial markets over the past few days. That said, comments from Fed Chair Powell after this week’s FOMC meeting have calmed some of those nerves. In our charts this week we delve into the following issues: ·         The latest Blue Chip consensus for policy rates ·         US gr...

Following a week in which the risks to the global economic outlook suddenly skewed to the downside, the pendulum has swung back again over the past few days. Confidence in a soft landing for the world economy has instead now re-surfaced partly thanks to firmer-than-expected global economic data, together with some solid corporate earnings reports from the United States. In our charts this week we...

Investors have grown increasingly cautious about the economic outlook in recent days, partly thanks to heightened geopolitical instability in the Middle East. That Fed Chair Powell has also expressed greater concern about the US inflation outlook has not helped, not least as higher oil prices (and the resilience of the US economy) had already been unsettling investors’ inflation expectations. In o...

This week’s stronger-than-expected US inflation data have further dampened hopes that the Fed would swiftly lower interest rates in coming months. And this has led to increased anxiety about the outlook for the US and broader world economy. In our charts this week we home in on: ·         The global growth consensus ·         The global inflation consensus ·         Energy prices and US inflation...

Renewed concerns about the US Fed's ability to lower interest rates in coming months have triggered broader anxiety in financial markets over the past few days. In our charts this week we focus on: ·         South Korea’s trade flows ·         Euro area CPI inflation ·         US money market inflows ·         Global economic policy uncertainty ·         US productivity and new business applicatio...

Recent weeks have seen heightened optimism in financial markets that the global economy is on course for a soft landing. This optimism is rooted in a number of factors, including stronger-than-expected economic data, dovish communications from several central banks alongside tame inflation outcomes in Europe and Asia. In our charts this week we offer further perspective on this narrative. Specific...

The decisions from several central banks this week have, on the whole, amplified hopes that the world economy remains on course for a soft landing. Investors were certainly reassured by the absence of big changes to the Fed's interest rate outlook as well as this week’s unexpected decision to cut interest rates by the Swiss National Bank. In our charts this week we examine: ·         US interest r...