UK inflation forecast update: more upside surprises in H2
The sharp rise in UK CPI inflation to 2.1% in May supports the long-standing forecast here of a move above 3% in late 2021. Continue reading
Chinese corporate liquidity squeeze suggesting darkening outlook
A case can be made that the most pressing monetary policy issue globally is the timing not of Fed tightening but rather of PBoC easing. Continue reading
Are medium-term inflation risks receding?
The surge in global broad money last spring and summer was expected here to result in a major inflation rise in 2021-22. A post in September presented reasoning supporting a forecast of 4-5% average G7 inflation in the two years to Q4 2022. Continue reading
Is the inventory cycle peaking?
Some forecasters expect global industrial momentum to receive a further boost over coming months from a rebuilding of manufacturing inventories. The assessment here, by contrast, is that the growth impact of the inventory cycle is peaking, although major weakness is unlikely until next year. Continue reading
Global monetary update: ongoing slowdown, China bottoming?
Additional country releases in recent days confirm that global six-month real narrow money growth fell further in April, to its slowest pace since January 2020 – see chart 1. The decline from a peak in July 2020 is the basis for the forecast here of a significant cooling of global industrial momentum during H2 2021. Continue reading
Are Fed / ECB balance sheet shifts driving EUR / USD?
Recent US dollar weakness against the euro, like the rally earlier in 2021 and a May-December 2020 slide, may reflect differential growth in net lending to government by the Fed and ECB. Continue reading