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:
- Since the start of the year, we have seen that a rising number of leading and financial ‘leading’ indicators have been pricing in a significant deceleration in the economic activity in the coming 6 to 12 months.
- Even though the Ukraine war shock is going to accelerate the process, global growth has been slowing down even before the February breakout, leaving market visibility extremely poor in the short to medium term.
- Hence, preference for the ‘safe’ US Dollar could remain high in the medium term.
Link to full piece:
MNI MARKETS ANALYSIS - Weakening PMI2.pdf
Since the start of the year, we have seen that a rising number of economic and financial ‘leading’ indicators have been pricing in a significant deceleration in the economic activity in the coming 6 to 12 months. Even though the Ukraine war shock is going to accelerate the process, global growth has been slowing down even before the February breakout, leaving market visibility extremely poor in the short to medium term.
The chart below shows that the aggressive tightening run by central banks is pricing in a significant plunge in the global manufacturing PMI in the coming 9 months (‘proxy’ for real time growth). Out of the 38 central banks tracked by the BIS, 24 raised interest rates this month to tame inflation and support the domestic currency. CBR is the only major central bank that cut rates this month following the emergency meeting this morning, lowering its benchmark rate by 300bps to support the economy. Hence, the light blue line represents the net central bank hikes in May (23), which has historically acted as a strong ‘leading’ indicator of the global economic activity.
Source: Bloomberg/MNI/BIS
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.