Global Data Pod

After a week in which growth prospects for 1H23 improved, inflation prospects improved as well this week. The disinflation trends that began in early 4Q22 continued through yearend as supply conditions look to be moving into better alignment with demand—a key condition that central banks need to see. But the journey has further to run, and the improvements will only be enough to get policy rates to hold in the coming months—not to start cutting. China re-opening is a positive for growth but the inflation impulse to the rest of the world will be keenly watched.

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.

 

Since the last JPMTV in mid-December, the news has been mixed but on balance shaves the risks of a near-term global recession, and boosts slightly the odds of a soft-landing while leaving a two-thirds chance of a recession by late-23/early-24. China’s COVID-drag looks worse but also points to a sooner-rebound, while stronger US expenditure data point to a more robust 4Q22. We are not out of the woods as the manufacturing sector looks particularly fragile and the Fed remains geared to stamping out inflation risks.

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.

A busy week of central bank meetings largely delivered on expectations, with the Fed and ECB slowing the pace of hikes to 50bp but underscoring their hawkish forward guidance. With Fed/ECB projected inflation running well above our forecasts next year, one question will be how they will respond if inflation undershoots those hawkish views. A special guest, Chief China economist Haibin Zhu, joins the call to discuss the rapidly changing China outlook. This will be the last episode for the year. Happy holidays to all.

Speakers:

Bruce Kasman

Joseph Lupton

Haibin Zhu

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

China appears to be relaxing its zero-COVID policy which will eventually open the door for a substantial growth rebound. However, a starting point of low immunity and limited health care capacity points to a bumpy growth path in 2023. It’s impact on the global economy depends on two key linkages – the impact of stronger demand on commodity prices and the impact of rising COVID cases on supply.

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. © 2022 JPMorgan Chase & Co. All rights reserved.

The near-term is characterized by a number of cross-currents, including brewing concerns about China, but the balance remains one of resilience. This week’s November PMIs paint a grim picture for global industry but other data show upside risk to the current-quarter growth outlook in the US and Europe. Global inflation is past its peak but remains elevated. The growth/inflation message reinforces our call for further rate hikes followed by an extended hold, but the risks around this are debated.

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. © 2022 JPMorgan Chase & Co. All rights reserved.

We probe key issues raised in our recently published 2023 global economic outlook. In the face of near-term risks to China and Western Europe we continue to  see the global economy to move forward on the back of fading supply-shocks that lowers inflation and fading DM fiscal drags. This will not, however, likely deliver a soft-landing scenario and we discuss the alternative scenarios in which the US and global economy could slip into recession over 2022-23.

 

Speakers:

Bruce Kasman

Joseph Lupton

Greg Fuzesi

Jahangir Aziz

 

This communication is provided for information purposes only. Institutional clients please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

 

After a late start to the hiking cycle, central banks have put in place a policy path that is expected to generate a sharp slowing in global growth—and a US recession—that will contain inflation pressures. This will take several quarters however as consumers are getting a near-term boost from fading inflation. The benefits are not felt evenly, with the US tracking strong growth his quarter, Europe expected to slide into recession, and China’s homegrown headwinds holding growth to below potential.

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. © 2022 JPMorgan Chase & Co. All rights reserved.

While not overreacting to one month of data, a welcome deceleration in US inflation this week points to both a consumer that is set for a marked improvement in purchasing power growth as well as a Fed that can slow its pace of hikes and eventually conclude by early next year. We maintain that recession risks are more of a concern for 2H23 rather than coming quarters, but recent indications of a sharp tightening in bank lending conditions raises some concern. China also remains a downside risk.

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. © 2022 JPMorgan Chase & Co. All rights reserved.

The latest PMIs are consistent with the global economy settling back to the lackluster pace of growth is has averaged this year, but the momentum-loss is a concern even if tempered by further signs of ongoing strength in labor markets. The Fed pivoted but in the hawkish direction this week as did ECB rhetoric, while a more nuanced message is coming from other central banks.

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. © 2022 JPMorgan Chase & Co. All rights reserved.

Nora Szentivanyi is joined by Katherine Marney to discuss the recently launched EM capital flows monitor, a new tool for tracking and nowcasting capital flows in Emerging Markets EM capital flows have become more diversified in the last ten years. FDI and loans carry more weight. Portfolio flows have weakened. Resident flows have become as large as non-resident flows. This is starkly different from the pre-2013 era, when resident outflows were small and capital flow dynamics were largely driven by foreign portfolio flows.

 

This podcast was recorded on October 31, 2022.

This communication is provided for information purposes only.  Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4237103-0, https://www.jpmm.com/research/content/GPS-4247869-0.pdf, https://www.jpmm.com/research/content/GPS-4120737-0  for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.