The latest Global PMI indicators of JPMorgan give an insightful picture about
- the fading momentum of US and UK growth expectations and
- the lagging pattern of European ones.
Please consider ‘Global economy hits speed bump, PMI dips from 22-month high’ by HIS Markit.
To start with, note the declining trend of the Global PMI indicator since the financial crisis, as well as the latest bump that inspired Markit’s title.
Unfortunately, we believe it’s more than a bump.
At the same time, Emerging markets (for once) and Europe (as usual) are lagging the US :
Markit comments: ‘Eurozone leads the developed world expansion’.
We believe it’s way too optimistic: if the US fails to drive global growth, where would the European lead come from ?
We suggest: Eurozone lags the US decline …
… and the end of the post Brexit magic :
The combination of declining leading indicators and rising inflation expectations could make the much awaited monetary normalization somewhat more disruptive.
We suggest to focus on the yield curve dynamics, more to come.