Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive summary
- A rising number of economic and sentiment indicators have been pricing in a significant deceleration in the economic activity in recent months.
- As stagflationary regimes have historically been negative for risky assets (i.e. equities), investors may prefer a defensive allocation for 2022.
Link to full piece:
The rise in market uncertainty combined with the sharp tightening in financial conditions has led to a significant deterioration in leading economic indicators globally. According to OECD ‘Diffusion’ Index, which looks at the percentage of countries with rising leading economic indicators (LEI), business activity is expected to decelerate sharply in the coming 6 to 12 months. The number of economic countries with rising LEI fell from over 90% in November to 25% in February (total of 39 countries).
The chart below shows that the OECD Diffusion index has strongly led the global manufacturing PMI (proxy for ‘real time’ economic growth) in the past 25 years (by 6 months).
Source: Bloomberg/MNI/OECD
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.