Top 5 Charts of the Week: China, Global Trade, Reflation, and Asian FX

By Callum Thomas

Here’s some of the standout economic and markets charts on my radar. I aim to pick a good mix of charts covering key global macro trends, and ones which highlight risks and opportunities across asset classes. Hope you enjoy!

1. Manufacturing PMI – China vs USA: T he November PMI data showed the US economy chugging along at a solid pace, and China’s economy continuing to lose momentum. Perhaps a salient chart given the weekend’s “news” of the trade war ceasefire (my take = constructive skepticism… i.e. we’ll see).

 

2. China Economic Policy Uncertainty:  Another November monthly stat – the economic policy uncertainty index for China. It moved up to its second highest level, which reflects the cyclical headwinds, political cross currents, and structural challenges. But there is a silver lining in this one, because part of the uncertainty gravitates around what/when/how much an eventual (my view, inevitable) stimulus program will be…

3. RWI/ISL Global Shipping Container Throughput Index:  Some more good news on the global trade front, on a seasonally and working day adjusted basis, the global container throughput index in October made its first new high since January – will markets likewise take their lead from this data?

4. Asian Currency Index (equal-weighted 10 currency index vs USD):  This chart comes from my latest weekly “Global Cross Asset Market Monitor“, and it’s one I’ve been paying close attention to recently. I think this one is really interesting because we see the Asian currency index rebounding off a key support level. If this rebound can stick it could well be the sign investors are looking for with regards to Asian and Emerging Market Equities.

5. Reflation Trade Capitulation:  What a difference a year makes… across a number of macro/sentiment indicators we’ve seen a 180 degree flip where complacency and euphoria have given way to pessimism and softening global growth momentum. A key indicator where we’ve seen this play out is the reflation trade positioning indicator, which simply shows capitulation.

Thanks for reading.

This article was originally posted by me on LinkedIn.  Be sure to connect with us there too.

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