« Chinese money trends still weak | Main | A "monetarist" perspective on current equity markets »

Global leading indicators less downbeat

Posted on Wednesday, October 9, 2019 at 02:59PM by Registered CommenterSimon Ward | Comments1 Comment

The OECD’s leading indicators support the signal from monetary trends that global industrial momentum is probably bottoming but will remain weak into 2020.

The chart shows the six-month rate of change of a global leading indicator derived from the OECD’s country indicators for the G7 and major emerging economies. Turning points in this rate of change have led turning points in six-month industrial output momentum by five months on average historically.

The six-month leading indicator change bottomed in February, suggesting a Q3 low in industrial output momentum. This accords with the signal from six-month real narrow money growth, which bottomed in November 2019 and leads by nine months on average.

The growth rates of the leading indicator and real narrow money were still low in August, consistent with economic momentum remaining weak through January and May 2019 respectively. Real money growth, however, is expected to have picked up significantly in September – a preliminary estimate will be available by early next week.

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (1)

Let us see what the data brings.

Also need consider the broken monetarist relationship in Europe. Why? Negative rates? Brexit? Something else?

Think should look at broad money too and M1/M3.

I expect recovery to take place from q3 2020 and be limited.

October 10, 2019 | Unregistered CommenterDavid Cotton

PostPost a New Comment

Enter your information below to add a new comment.
Author Email (optional):
Author URL (optional):
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>