In today’s briefing:
- Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 7 Jun 2024
- Business Cycle Watch – What if ISM Manufacturing rises to 56?
- Fragile Energy Security: Europe’s Gas Supply Woes Continue
- CX Daily: Logistics Is Getting Pricy in China, but Reform Will Be a Long Haul
- US Nonfarm Payroll Change 272k (consensus 185k) in May-24
- HEW: Cuts Decouple Unsustainably
- Thailand CPI Inflation 1.54% y-o-y (consensus 1.2%) in May-24
- Canada Unemployment Rate 6.2% (consensus 6.2%) in May-24
Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 7 Jun 2024
- Asian PMIs and US Economic Concerns: India leads the region with a strong PMI of 57, while Hong Kong reports a decline. The US PMI is troubling, with new orders dropping significantly, reflecting declining demand in the trucking industry.
- Indian General Election Results: The BJP performed weaker than expected, contrary to exit polls. Despite the NDA retaining power with Modi as Prime Minister, economic activities and projects remain strong, indicating positive economic growth.
- Economic Outlook and Upcoming Reports: India’s GDP growth remains robust with projections up to 8.4%. An upcoming China report aims to provide new insights, potentially altering perceptions formed by mainstream Western media.
Business Cycle Watch – What if ISM Manufacturing rises to 56?
- The ISM figure for May surprised negatively Monday, admittedly a short-term setback for the whole reflation story we have laid out over the past months.
- There are however signs that we could be in for a VERY hot summer/autumn in manufacturing terms, and market pricing in cyclicals vs defensives are still showing support for materially higher ISM manufacturing levels around 56-57.
- Chart 1a: Cyclicals vs Defensives. It might seem surprising to discuss the ISM reaching 56, but there are intriguing signs from high-beta economies like Sweden, Germany, Canada, and South Korea.
Fragile Energy Security: Europe’s Gas Supply Woes Continue
- The European gas market panics despite 70% storage levels after Norwegian outage.
- Disruption exposes Europe’s vulnerability due to reliance on few gas suppliers. Norway supplied 30% of Europe’s gas in 2023.
- Rising demand from Asia eating up some of Europe’s gas imports. Competition between the two continents to intensify as global demand picks up.
CX Daily: Logistics Is Getting Pricy in China, but Reform Will Be a Long Haul
- Logistics / In Depth: Logistics is getting pricy in China, but reform will be a long haul
- AI /Stanford students apologize after being accused of copying Chinese AI model
- PMIs /Analysis: Why China’s manufacturing PMIs went in different directions in May
US Nonfarm Payroll Change 272k (consensus 185k) in May-24
- The nonfarm payroll additions significantly exceeded expectations, indicating a strong labour market which could potentially boost consumer spending and economic growth, even as the unemployment rate rose to 4.0%.
- Average hourly earnings increased and private sector employment growth was robust, both factors contributing to economic stability.
- However, mixed indicators from retail sales, production, and the manufacturing sector suggest the presence of underlying economic challenges.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
HEW: Cuts Decouple Unsustainably
- The ECB and Bank of Canada have implemented the anticipated rate cuts, with future actions dependent on further data. Despite a surge in US payrolls and wages, Europe cannot depend on decoupling inflation to justify the risky rate cuts without a recession.
- The upcoming Fed decision is the primary focus, with the associated dot plots expected to indicate two cuts in 2024.
- Other decisions are expected from Thailand and Peru, while updates on the UK macroeconomic environment will come from labour market and GDP data.
Thailand CPI Inflation 1.54% y-o-y (consensus 1.2%) in May-24
- Thailand’s CPI inflation in May 2024 was 1.54% year-on-year, exceeding consensus estimates, suggesting rising consumer demand and price pressures.
- The Core CPI inflation remained at 0.39% year-on-year.
- Goods pipeline pressures are contributing to the headline, as shown by the 3.36% PPI inflation in April 2024.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Canada Unemployment Rate 6.2% (consensus 6.2%) in May-24
- Canada’s unemployment rate in May 2024 increased to 6.2%, marking the highest since January 2022, due to a weakening labour market despite modest employment gains of 26.7 thousand.
- Simultaneous economic data showed declining retail sales, stagnant GDP growth, and a shrinking manufacturing sector.
- This data indicates a wider economic stagnation, suggesting the need for proactive policy measures.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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