The shorter-term leading indicator followed here suggests that global growth will strengthen into the spring – see Monday’s post. The following charts provide some country detail.

The first chart shows indicators for the G3 plus the UK. The latest readings are all positive; between February 2010 and September 2012, at least one was negative in every month bar one (February 2012). The current pick-up, therefore, has breadth. Another standout is the speed of recent improvement in Japan.

The second chart separates out the big four Eurozone economies. This is less encouraging, with German buoyancy and Italian improvement contrasting with weakness in France and, especially, Spain. This divergence is also evident in real narrow money trends – see previous post. Without a balanced recovery, doubts about the sustainability of the Eurozone in its current form are likely to persist.

The final chart shows the six-month rate of change of the Journal of Commerce index* of industrial commodity prices together with a leading indicator for the emerging E7** countries, which drive incremental demand for raw materials. The continued rise in the indicator suggests that the recent rally in commodity prices will extend, in turn putting upward pressure on inflation rates globally later in 2013.

*Covering 18 materials used in manufacturing production including crude oil and natural gas.
**Defined here as BRIC plus Korea, Mexico and Taiwan.