Your browser does not support JavaScript! Pls enable JavaScript and try again.

Economy

Economic Data Do Not Confirm Signal from US Yield Curve

Posted on

Just as the debate on the prospect of a global recession has intensified, exacerbated by the curve inversion of the US 3month versus 10Yr Treasuries yield, comes a timely intervention from recent supportive data.

 

Incoming US economic data showed solid ISM manufacturing after early-year weakness while durable orders were as expected. Hence, it seems that US business equipment investment could continue to contribute positively to growth in 2019. Citi’s economists think market pricing of a near–term recession is overdone relative to fundamentals.

 

 

The recovery in China’s PMI hints at economic stabilization: China's official manufacturing PMI rose 1.3pp to 50.5 in March, much higher than consensus for 49.6 and returning to expansionary territory after contracting for three months.

 

Stabilization in China would be good news for Germany, where factory orders keep plunging: The PMI figures confirm that manufacturing remains the main drag on overall activity, especially in Germany and the Eurozone service PMI saw the highest reading since November. In the UK, the Brexit saga continues but no-deal is (almost) ruled out, while long extension and snap elections are very likely.

Related Articles