Macro Pulse

With little to destabilise financial markets over the past few days, soft landing narratives have remained in vogue. While this week’s US CPI report was certainly a little stronger-than-anticipated, other indicators, including the latest UK labour market report, were more benign. In charts this week we look in more depth at: ·       US Inflation drivers ·       The health of the UK labour market ·...

The equity market rally that kicked off in late October has grabbed the financial headlines in recent weeks. And there has been an abundance of optimistic narratives that support the rally’s rationale and the prospects for an extension in the near term. In this week’s charts we provide some insights into some of these narratives. In particular we focus on: ·       The renaissance in US manufacturi...

Prospects for a swift pivot toward looser monetary policy in the US and Europe have been diminished by persistent inflationary pressures and stronger-than-expected labour market conditions over the past few weeks. Equity market sentiment in most major economies, however, has remained resilient, buoyed by a positive stream of corporate earnings news, especially from the technology sector. In our ch...

A quiet economic calendar coupled with holidays in North America and much of Asia have left markets struggling for direction in recent days. A noteworthy development, nevertheless, was this week’s FOMC minutes which revealed concerns among some members about reducing US policy rates too soon. In our charts this week we home in on the following: ·       Market expectations for Fed policy ·       In...

Stronger than expected US inflation data this week has dampened hopes that the Fed might swiftly reduce interest rates in the coming months. This comes on the heels of a flurry of firmer-than-expected US economic data in recent weeks that had previously undermined the case for an early pivot toward looser monetary policy. Still, as we illustrate in several of our charts this week, evidence is accu...

Last week's surprisingly strong US employment report has diminished investors’ expectations that central banks would quickly shift to more relaxed monetary policies. Nonetheless, equity market sentiment across most major economies has remained resilient, buoyed by positive corporate earnings news. In our charts this week, we examine: ·         Consensus forecasts for central bank policy ·        ...

Incoming data have reinforced a soft landing narrative in financial markets over the past few days. And although there was some push back from the Fed against expectations that it might begin cutting policy rates as soon as March, there was equally little to challenge the idea that a pivot toward looser monetary policy will shortly emerge. In our charts this week we home in on: ·         Data surp...

Lingering tensions in the Middle East are now adversely affecting shipping costs and raising concerns about the durability of global supply chains. Recent commentary and some data points, in the meantime, have also been casting more doubt on the willingness of central banks to swiftly pivot toward looser monetary policy. In our charts this week we focus on: ·         Global shipping costs ·      ...

Over the past few days there has been further pushback to the idea that central banks might initiate easing cycles in the immediate months ahead. Added to this the flare up of instability in the Middle East has been another factor amplifying investor anxiety. Andy Cates and Tian Yong Woon discuss these and other issues in their podcast this week. Meanwhile, our charts this week focus on: ·        ...

The soft-landing consensus that emerged toward the end of last year has come under increased scrutiny in recent days. Specifically, there are now more doubts about the notion that central banks will shift towards a much more accommodative monetary policy in the coming months. In this week's charts, we look more closely at consensus views for 2024. More specifically, we home in on: ·         The st...

The growing belief that central banks may start easing cycles within the next few months, coupled with the increasing plausibility of a soft landing for the world economy, has fuelled a rally in financial markets over recent weeks. In our charts this week we investigate that narrative with some perspectives on: ·         The policy rate consensus ·         Equity market performance ·         The U...

A growing belief that central banks have not only concluded their tightening cycles but could even initiate easing cycles within the next six months has continued to fuel a rally in and bond and equity markets over the past few days. In our charts this week, however, we steer away from the daily macro and market news cycle and highlight six charts instead that give some colour on some of the key m...

There has been little to dislodge the growing conviction in financial markets about soft landing scenarios over the past few days as data calendars have been thin and policymakers have been relatively quiet. Investors have, therefore, taken their cue from the dataflow that’s been released over the past month suggesting that inflationary pressures are cooling and that further interest rate hikes co...

Growing conviction that central banks have concluded their tightening cycles has fuelled a rally in stock and bond markets over the past two weeks. And that conviction has been reinforced by some weaker-than-expected inflation data over the past few days. In our charts this week we weigh in on this and on other factors including: ·       Core inflation trends in advanced economies ·       The glob...

During a week with minimal market-moving data and few central bank announcements, attention in the financial markets has turned towards the oil sector. This shift is primarily due to a significant drop in oil prices, which have reached three-month lows, with Brent crude trading at approximately $80 per barrel. In our charts this week we look at the following factors: Record-low global supply chain...

Financial market sentiment has improved in recent days, partly thanks to the Fed’s decision this week to leave interest rates on hold. Although this decision was largely expected, recent data from the US as well as from Europe have additionally bolstered the belief that a global tightening cycle may be near its end. In our charts this week we home in on this and other themes. Specifically we exami...

Financial markets have been more unsettled over the past few days partly because of an escalation of geopolitical tensions in the Middle East. But this has been exacerbated by a mixed set of company earnings reports from the United States coupled with lingering concerns about the trajectory of bond yields. In our charts this week we offer some insights on these issues with some perspective on: ·  ...

Geopolitical instability in the Middle East has continued to weigh on sentiment over the last few days not least given its potential to amplify financial instability. In our charts this week we look at this and other factors driving the global economic outlook. Specifically we home in on: ·         Geopolitical risk and financial stability ·         Energy prices and stagflation risks ·         Ch...

The flare up of geopolitical instability in Israel and Gaza has led investors to re-examine the outlook for the world economy over the past few days. But the release of the IMF’s latest World Economic Outlook publication also grabbed some of the financial headlines though whether its staff additionally need to now re-examine that outlook remains to be seen. In our charts this week we take a look a...

A further steep climb in US Treasury yields has been in the eye of the storm for financial markets over the past few days. In our charts this week we assess this trend and its driving factors. Specifically we home in on: ·         US yields and the dollar ·         Expectations for the Fed ·         Quantitative tightening policies and real yields ·         Inflation expectations and oil prices ·...

Financial markets have been much more unsettled in recent weeks largely thanks to a “tighter for longer” narrative from the US Fed and a further steep climb in US Treasury yields. In this week’s charts of the week publication we focus on this and other issues including: ·         Slowing world trade growth ·         Ebbing consumer confidence ·         Broad money supply contractions in the euro a...

Financial markets have been on the back foot in recent days with some oil-related inflation jitters combined with a “tighter for longer” message from the Fed a couple of contributory factors. In our charts this week, we made a nod to these and other issues with some colour on:   ·         Firming US Treasury yields ·         Higher consumer energy prices ·         UK financial markets (this year v...

Following this week’s ECB policy decision, investors will likely remain focused on central banks in the coming days with the Fed, the BoJ and the BoE all due to meet next week. With that in mind, we look at some of the key considerations for these policymakers in our charts this week. Specifically we home in on:   ·         Quantitative tightening and real yields ·         A mixed global growth co...

The world economy’s resilience over the last few months has surprised many forecasters but the incoming data from Europe coupled with a further climb in the price of oil suggest that downside risks are accumulating. In our latest charts of the week publication we dig into this with some perspectives on: ·       Recent global business surveys ·       Credit impulses in the US and euro area ·      ...

The trend toward higher government bond yields that had been in vogue for much of August has reversed in recent days. This can be traced to a batch of weaker-than-expected economic data and stronger suggestions, in particular, that the US labour market is re-balancing. In our charts this week we offer some colour on:   ·       The re-balancing of the US labour market ·       Data surprises in the...