| The global economy slowed in mid-2019 on the combination of higher interest rates and the trade war. Since then the Fed and others have lowered rates and now we have a ceasefire in the trade war. Some things like real estate have quickly turned around and stock markets are clearly pricing in more of the same, yet manufacturing is still soft. A few manufacturing surveys were out today and the theme was a continue flatline. A good spot to watch is the JPMorgan global PMI because it aggregates them. It started 2018 at 54 then slowly sank to 49.3 into mid-2019. The latest number was out today at 50.1, which is barely expanding and lower than the previous month. The other spot to watch is AUD/USD. At the end of December it broke above the 200-day moving average for the first time in 23 months. That’s a great sign for the reflation and global growth trade. |
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