Global Data Pod

Nora Szentivanyi is joined by Ayako Fujita and Benjamin Shatil to discuss the latest developments in the Bank of Japan’s path towards monetary policy normalization. We do not expect the new BoJ nominations to materially affect the timing of YCC removal which we still see taking place around mid-2023. However, rising demand-side pressures on prices and growing market pressures suggest risks are for an earlier move.

Our forecast also anticipates an eventual exit from negative interest rates (NIRP) by 2024. The BoJ’s shift will have important implications for capital flows and the yen as Japanese investors continue to rotate investments from foreign assets back to domestic debt.

This podcast was recorded on February 13, 2023.

This communication is provided for information purposes only.  Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4332950-0.pdf  https://www.jpmm.com/research/content/GPS-4310608-0  https://www.jpmm.com/research/content/GPS-4316195-0   for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

 

We continue to process January activity readings which point to the US expansions remaining intact while the China reopening bounce gathers. But this week’s news was the surprising firmness in January core CPI readings. The message of positive growth and inflation news should be reinforced by next week’s US reports where we look for a rise in core CPI of 0.5% m/m and a 2.2% bounce in retail sales.  

Speakers:

Bruce Kasman

Michael Hanson

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

Nora Szentivanyi is joined by Katherine Marney to discuss an improved macro landscape for EM and what it means for growth, capital flows and monetary policy. The fading of key near-term headwinds has led to a strong start for EM capital flows, and we believe these sources of support, including China’s re-opening, disinflation, and reduced near-term recession risks can last a while. Prospects of a late 2Q Fed pause, weaker USD and better global growth should open up space for EM central banks to ease monetary policy this year. Sustained strength in the US labor market poses a risk to this view. But provided inflation eases as we expect, and barring a re-pricing of the US dollar, we think the macro backdrop can remain supportive for EM. 

 

Speakers

Nora Szentivanyi, Economic Research

Katherine Marney, Emerging Markets Economic and Policy Research

 

This podcast was recorded on 7 February 2023.

This communication is provided for information purposes only. Institutional clients can view the related report https://www.jpmm.com/research/content/GPS-4325660-0.pdf, https://www.jpmm.com/research/content/GPS-4296890-0, https://www.jpmm.com/research/content/GPS-4316594-0, https://www.jpmm.com/research/content/GPS-4321526-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

On this week’s Global Data Pod Edge, our focus is on Saudi Arabia, Oman and Bahrain. Our economists covering the region had one full day of meetings in each of them. They met with authorities and local companies. The podcast discusses recent developments and 2023 outlook for this set of GCC economies.

The mood in the area remains positive after a strong year which saw high growth thanks to the rebound in hydrocarbon production as well as a strong and resilient non-hydrocarbon sector performance. On top of that, the region experienced a limited amount of inflationary pressure, well below anything seen in other Edge countries or around the entire globe. Hydrocarbon prices are expected to continue to be supportive but surely some differentiation remains amongst countries and expectations for their 2023 performance. We invited two of our Edge Economists, Anatoliy Shal and Francesco Arcangeli, who recently returned from a business trip from the area to discuss their impressions.

Speakers

Nicolaie Alexandru-Chidesciuc, EM, Economic and Policy Research

Francesco Arcangeli, EM, Economic and Policy Research

Anatoliy A Shal, EM, Economic and Policy Research

 

This podcast was recorded on February 6, 2023.

This communication is provided for information purposes only.  Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4322630-0  for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

 

After a few weeks of data fanning worries of a near-term recession, this week’s activity data provided relief. The global January PMIs improved broadly across countries and sectors. In the US, a gangbuster payroll report belied a number of more anecdotal reports suggesting labor market retrenchment. Also, the US consumer looks to have opened their wallets in January for motor vehicles. Not all is rosy, as the industry data out of Asia continue to be ugly and the risks outside of China are skewed to the downside. News on capex spending is also softening. Moreover, while US and European resilience is welcomed, too much strength reinforces the risk of more aggressive rate hikes that risk recession later.

Speakers:

Bruce Kasman

Joseph Lupton

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

The EM Edge economies are a diverse group across the globe—from investment-grade countries, including some large oil-exporting economies, to sovereigns long since in financial distress. In between are many frontier markets with varying degrees of vulnerabilities. Understanding external financing needs and sources is a critical piece of the analytical puzzle for such economies, where funding needs, external and domestic, act as binding constraints that shape economic policies.

This year brings signs that several sources of stress that have buffeted emerging markets could be ebbing: global food and energy inflation are slowing. Reopening in China may help offset downside risks to growth elsewhere. Signs that inflation has peaked in the US have raised hopes for a soft landing that would allow the Fed to relax its hawkish stance. Important risks remain, however, including a scenario in which disinflation stalls and global central banks continue tightening. With this in mind, we discuss external funding needs across Edge economies this year and invite two of our Edge Economists, Gbolahan Taiwo and Jin Tik Ngai, to dive more into Egypt and Pakistan.

Speakers

Nicolaie Alexandru-Chidesciuc, EM, Economic and Policy Research

Ben Ramsey, Emerging Markets Economic and Policy Research

Katherine Marney, Emerging Markets Economic and Policy Research

Gbolahan Taiwo, EM, Economic and Policy Research

Jin Tik Ngai, Emerging Markets Asia, Economic and Policy Research

 

This podcast was recorded on 30 January 2023.

This communication is provided for information purposes only. Institutional clients can view the related report https://www.jpmm.com/research/content/GPS-4309915-0 and https://www.jpmm.com/research/content/GPS-4306281-0  for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

 

Next week will deliver three eventful central bank meetings as we expect the Fed, ECB, and BoE to continue to hike but also provide guidance on the path ahead while also maintaining optionality. Nevertheless, with rates restrictive, central banks have become more data sensitive. In this regard, next week will also deliver a set of key data on growth, inflation, and labor markets.

Speakers:

Bruce Kasman

Joseph Lupton

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

Nora Szentivanyi is joined by Raphael Brun-Aguerre and Dan Silver to discuss the 1H23 global inflation outlook. We anticipate that the slump in manufacturing, fading commodity price shocks and easing supply bottlenecks will drop global goods inflation to 1%ar in 1H23. Regionally, we expect downward pressure to be concentrated in Europe where the benefits of the unwind in the natural gas price shock is substantial. Emerging markets should also see a large drop in goods inflation, helped by a rebound in EM currencies and lagged effects of supply chain normalization. While China’s re-opening is a key reflationary impulse, we do not expect it to disrupt the near-term global disinflation trend.

The drop in goods inflation bolsters the case for a central bank pause. In Emerging markets, central banks are already moving to the sidelines, and we see eight countries cutting policy rates this year. The bar for a pause is higher in DM and will also depend on labor market and wage developments; we see the Fed hiking through 1Q23 and the ECB into 2Q23..

Speakers:

Nora Szentivanyi, Economic and Policy Research
Raphael Brun-Aguerre, Economic and Policy Research
Daniel Silver, Economic Research

This podcast was recorded on January 24, 2023.

This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4311009-0, www.jpmm.com/research/content/GPS-4310687-0, www.jpmm.com/research/content/GPS-4302639-0, www.jpmm.com/research/content/GPS-4306146-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

Having trimmed near-term recession risks recently, this week delivered stronger than expected data from China and a reassessment upward of our European outlook. However, not all is up. Disappointing US retail sales and IP data raise some concerns, but we are inclined to fade this given still-solid fundamentals. Fed speak this week shows growing comfort with 25bp, while hawkish comments from the ECB suggests a longer road to terminal. The BoJ left YCC unchanged as we expected, but disappointed markets.

Speakers:

Joseph Lupton

Michael Hanson

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.

Michael Feroli, J.P. Morgan’s Chief U.S. Economist, is joined by Bob Cusack, Editor in Chief of The Hill, for a discussion on policy, politics and the U.S. economy. Among the topics discussed, the two explore what implications the new leadership in Congress could have for government spending, and also take an early look at the 2024 presidential election.

 

Speakers:

Michael Feroli

Bob Cusack

 

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.