In today’s briefing:
- ISM at 46: Recession Within Six Months, or This Time Is Different?
- The Economic Impacts of De-Risking on Asia
- Asset Allocation Watch: Macro Regime Indicator – Introducing Our Brand New Asset Allocation Model
- China’s Policy Dilemma: Getting Used to Mediocre Growth
- CX Daily: Metal Magnate’s Fall From China’s Rich List to Bankruptcy
- The Great Game – A Drunk Uncle in the Metaverse
ISM at 46: Recession Within Six Months, or This Time Is Different?
- US GDP growth has been negative on average in the six months following an ISM Manufacturing Index of 46 or lower.
- The US unemployment rate rises significantly when the ISM Manufacturing drops to 46 or lower.
- A in-depth analysis of the ISM pattern during major economic downturns reveals this time may still be different.
The Economic Impacts of De-Risking on Asia
- Asia may be expected to suffer some loss in export demand due to emerging trends such as near-shoring that divert production activity away from China and Asia more broadly.
- The process of undoing global trade interlinkages will also have negative spillovers on economic efficiency and the diffusion of knowledge and technology.
- But emerging Asia need not be a hapless bystander; bolstering its internal adaptive capacity and promoting intra-regional trade will strengthen its position in this new world.
Asset Allocation Watch: Macro Regime Indicator – Introducing Our Brand New Asset Allocation Model
- Each month we assess the macro environment based on liquidity, inflation and growth models. Our models were right that inflation, growth and liquidity would all drop in June, but for July we see a possible slight uptick in growth, while inflation and liquidity will continue down.
- Welcome to our monthly Macro Regime Indicator update. We aim at updating you on our base-case projections for liquidity, inflation and growth and how to optimally allocate according to the regime based on our empirical beta studies in the brand new asset allocation model available in our data-hub.
- We highlighted how liquidity, inflation and growth would all decline through June, which proved to be the correct projection. Liquidity shrank around $300bn through the month, inflation declined from from 4.9% to 4% and ISM declined from 46.9 to 46.0.
China’s Policy Dilemma: Getting Used to Mediocre Growth
- Past super-charged investment rates funded by excessive leverage meant that China borrowed growth from the future. Now the bills are coming due in the form of lower growth.
- A deepening psychological malaise is affecting economic agents. This malaise is rooted in worries about China’s structural problems such as weak demographics and high debt.
- The government may step up policy responses but shy away from the needed structural reforms. The 5% growth objective may still be achieved but downside risks will remain.
CX Daily: Metal Magnate’s Fall From China’s Rich List to Bankruptcy
- Metal /: Cover Story: Metal magnate’s fall from China’s rich list to bankruptcy
- Personnel /: China central bank Deputy Governor Pan Gongsheng named Communist Party chief
- China-U.S. /: China, U.S. have shared interests in getting ties back on track, party official says
The Great Game – A Drunk Uncle in the Metaverse
- In an era that’s increasingly defined by technology, geopolitics too has embraced the trend. Case in point, the Shanghai Cooperation Organisation (SCO) Summit.
- This year, the meeting is taking place virtually, with India taking on the mantle of host, guiding the event seamlessly through cyberspace – or should we say the SCO Metaverse?
- Let’s take a look at the main acts and what we will remember.
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