Our forecast incorporates the improved tone of recent economic reports as well as the anticipated bounce-back in motor vehicle production from the current severely depressed levels in the third quarter. We now expect third quarter GDP to be solidly positive, which means the recession will likely end this summer.
The stand out market trends of the past month or so have been the massive sell off in long bond yields, the substantial depreciation of the USD and the surprising power of credit rating agencies with some of their recent pronouncements on sovereign credit rating risks.
The financial markets have latched on to some positive signs for economic recovery in recent weeks after an unrelenting series of negative news in previous months. This has led in our view to an overly optimistic outlook, reflected in some exchange rate and interest rate trends. We look for some…
Investors thought they heard the death knell for global recession in May and increased their appetite for risk, shying away from government bonds and buying equities, commodities and currencies except the U.S. dollar. As a result, the global stock market index we watch increased by 12.2%, oil prices rose 34%,…
The global recovery in 2009 is likely to be stronger than expected by consensus. We continue to expect the global recession to end in Q3 2009 and see this as one of the dominant drivers for financial markets in coming quarters. A combination of very lean inventories and a recovery…
Leading indicators continued to improve in May. The development points to a rather synchronous recovery with improvement in leading indicators in all regions. The picture of improvement is supported by significant rises in metal prices and freight rates recently. Global PMI rose to 45.3 in May from 41.8 in April…
With the doomsday scenario apparently off the table, prospects for recovery have helped fuel the resurgence in stocks and in some commodity prices. The first wave of the Treasury’s unprecedented debt sales have been absorbed relatively smoothly, though the US dollar has weakened substantially on concerns about the mounting government…
