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While some countries, including Sweden and United states, have eschewed national lockdowns over the past nine months or so the vast majority have adopted unprecedented measures to deal with a once in a century pandemic which has so far cost almost 1.4 million lives. The strategy has invariably been a simple yet complex one – to save lives – but
Read moreWe are sticking to our forecast, first set out in Shape of Recovery: Square Root & Hockey Stick (5th June 2020) that global GDP, which contracted about 7.0% qoq in Q2 (a number flattered by China’s GDP), will rise a record-high 3.0% qoq in Q3. However, this implies that world GDP will still only be at the level which prevailed
Read moreMuch of the market focus in recent months has been on major reserve currencies, namely: The US Dollar which, contrary to bearish expectations and in line with our benign Dollar view, has treaded water in the past six weeks and since the Fed’s tweak on 27th August to its dual inflation and employment mandate; The Euro’s rapid appreciation in July,
Read moreMarkets bereft of key macro data releases and policy events in recent days will be turning their attention tomorrow to the European Central Bank’s policy meeting. The consensus forecast, which we share, is that the ECB will leave its policy rates, including its deposit rate (-0.50%), and the modalities of its PEPP and APP unchanged. However, unnamed ECB Governing Council
Read morePrice action in major currencies was again subdued last week. With few tier-one macro data releases for markets to trade off the focus was on the reaction function of governments and central banks to covid-19 related developments. Only a handful of currencies appreciated by more than 1% vs the Dollar last week and no major currency depreciated by more than
Read moreMajor currencies, equity markets and the price of crude oil since 8th June – the cycle low in the US Dollar – have exhibited reasonably limited directionality, narrow trading ranges and very low volatility, with the notable exception of currencies in Latin America. However this is not a case of more confident financial market participants finding their feet, in our
Read moreWhile GDP data for Q1 are now “old” and seemingly of limited use, it makes little sense to forecast global growth in Q2 and beyond without at least knowing the starting point. We estimate, based on data for 19 major economies, that global GDP growth slowed to -2.6% yoy in Q1 from +3.0% yoy in Q4 2019 and to -4.3%
Read moreGlobal GDP growth, in year-on-year terms, slowed to -2.7% in Q12020 from +3.1% in Q4 2019 and in quarter-on-quarter terms to -4.5% from +0.6% in Q4, based on growth rates in 14 major economies accounting for close to 90% of world GDP. Global GDP growth in Q1 was at its weakest in over thirty years, at least in quarter-on-quarter terms.
Read moreForecasts of the scale of a likely global economic recession and the shape of the recovery often give little thought to the economic variables being measured or their timeliness. Based on 4X Global Research’s own quarterly global GDP series and its correlation with the global PMI Composite Index, we estimate that global GDP growth slowed to about 0.5% yoy in
Read moreThe consensus forecast is that GDP contracted in many major economies in Q1 and will most definitely contract in Q2 as a result of the negative impact of national lockdowns on supply and demand. The implication is that these economies will be in recession – defined at a country level as two consecutive quarters of negative quarter-on-quarter GDP growth. A
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