Global Data Pod

Global Data Pod Weekender: Looks can be deceiving

Behind welcomed resilience, the data flow of late reveals a vulnerable global expansion at midyear. While strong US June payrolls should disabuse those thinking the US is already in recession, it raises concerns about long it can last given soft GDP growth and the resulting drag on profits. Similarly, a strong global PMI report for June masks underlying momentum loss excluding a robust reopening bounce in China. 

 

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.

 

Global Data Pod Weekender: We hold these shocks to be self-evident

After a weak first-half, unrelenting adverse shocks look set to reduce global GDP growth in the second half to remain below trend. The data flow this week—from disappointing news on the US consumer to a grim PMI report on global industry—underscore that momentum loss at midyear. With the bar on growth lowered, the next rung for downside risks to flag is a global recession. Short of this materializing, the Fed is likely to stay the course until reaching 3% on rates before turning somewhat more growth-sensitive.

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.

Global Data Pod Weekender: From resiliency to fragility

In the wake of impressive resilience through 1H22, the global expansion looks increasingly brittle at midyear. While activity data from Asia show an encouraging bounce back from earlier pandemic drags, relentless inflation headwinds threaten to break the back of the consumer in the US and Europe. Confidence has dropped to forty year lows in Europe, while US and European flash PMIs took a larger than expected dip in June—with a surprising decline in the service sector PMI belying the strength of the much-anticipated re-opening dynamic. Next week’s inflation and survey readings to further underscore downside 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. © 2022 JPMorgan Chase & Co. All rights reserved.

 

Global Data Pod Weekender: When the Fed breaks

China is rebounding smartly in May, and spillovers from the downturn remain mild. But inflation is surging everywhere and this is damping growth in the goods sector. The Fed upped its hiking pace to 75bp this week with another likely to come, guiding to a restrictive stance before yearend. In doing so while also now forecasting a rising unemployment rate suggests a singular focus on inflation and less of a growth-put than in the past—at least until inflation moderate.

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.

Global Data Pod EM Asia: Going from “acute to chronic” as the “mercury rises”

Arindam and Sin Beng discuss some of the key drivers of the macro narrative in EM Asia for 2H22, which we have coined – on the macro side “Mercury Rising” – and for strategy it’s going “From acute to chronic.”  We talk through some the salient drivers underlying these macroeconomic views and their implications for FX and rates markets.

This podcast was recorded on Jun 16, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at https://jpmorganmarkets.com/research/content/GPS-4119405-0 and https://jpmorganmarkets.com/research/content/GPS-4121834-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

Global Data Pod Weekender: The beat goes on

This week’s news centered around continued upward inflation pressure and the response from those central banks with still accommodative stances. The ECB made a significant shift this week and now looks likely to hike 125bp before year end. The RBA is also front-loading its rate hikes with the Fed set to deliver a 50bp hike with the promise of more to come. This dynamic is unlikely to change until growth slows materially, a development we now expect for the US during 2H22.

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.

Global Data Pod Weekender: Careful what you wish for

The latest data continue to show encouraging resilience to the headwinds weighing on growth in 1H22. Strong labor markets are supporting consumers while factory output is humming along outside of China and Russia. Although the downside risks remain material for the near-term, the medium-run risk is shifting to a 2H22 rebound with upside inflation pressures that require more central bank normalization than currently expected.

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.

Global Data Pod Weekender: Resilient but worried

The latest data underscore the remarkable resilience of the global expansion, a testament both to the bounce-back potential still levering growth as well as the robustness of the fundamentals. However, with the headwinds intensifying rather than fading as we have hoped for, the risks to 2H22 are skewing down. Along with a global overview, we do a deeper dive on the US consumer and the Fed with US economist Peter McCrory.

Speakers:

Joseph Lupton

Peter McCrory

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.

Global Data Pod Japan: Broadening cost passthrough shifts Japan’s inflation higher

Featured in this podcast are Ayako Fujita and Yuka Mera. The recent significant cost pressures have hit firms in Japan, but Japan’s CPI inflation remains low, with limited cost passthrough. This is particularly notable among SMEs, as large companies have forced them to limit price increases. To address this, the government is creating policy to enforce cost passthrough, such as changing legal operation standards and strengthening its monitoring system. Such moves likely will help Japan break out of its long-standing low-inflation equilibrium. We thus expect the trend of core inflation (ex. food and energy) will rise from a pre-pandemic three year average of 0.3%oya to around 1.2% by the end of 2022. However, even with this acceleration, inflation still remains well below the BoJ target of 2%, and therefore we don’t expect a policy shift from the BoJ. If a positive cycle can be created in which a rise in firms’ pricing power leads to higher wages, which in turn raises consumers’ purchasing power, we would expect to see a further shift up in core inflation, leading to a policy shift from the BoJ.

This podcast was recorded on May 24, 2022.

This communication is provided for information purposes only. Institutional clients can view the related report at https://jpmorganmarkets.com/research/content/GPS-4099664-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2022 JPMorgan Chase & Co. All rights reserved.

Global Data Pod Weekender: Worried yet?

The data this week underscore a worsening headwind from China and a continued purchasing power drag from rising refined energy prices. However, it also showcases the strength and resilience of the consumer. Despite rising market jitters, we (and more importantly the Fed) have conviction the expansion continues.

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.