Three Big Global Questions

Transcription

1 Three Big Global Questions Nick Kounis Head Macro & Financial Markets Research Marine Money Singapore 22 September 2015

2 Will developed economies continue to recover? 2

3 US consumer making a comeback Job gains, 3m mav. 000s Unemployment rate, % , Nonfarm payrolls (lhs) Unemployment rate (rhs) Source: Thomson Reuters Datastream 3

4 Eurozone bank loans more available Net tightening of conditions, balance Tighter Easier Large firms SMEs Source: Thomson Reuters Datastream, ECB Bank Lending Survey 4

5 The fall in oil prices is a positive for DMs Gain from USD 50 drop in oil prices, % GDP JP EZ US UK Source: ABN AMRO Group Economics, BP 5

6 ECB and BoJ to step up monetary stimulus Mario and Haruhiko taking over from Janet. 6

7 Falling like a brick DM exports to BRICS Exports to the BRIC countries from the US and eurozone, % yoy US Eurozone Source: Thomson Reuters Datastream, ABN AMRO Group Economics 7

8 Are emerging markets set for a new crisis? 8

9 Turn in sentiment triggers net capital outflows Net portfolio inflows into EMs, USD bn Equity flows Debt flows Source: Institute of International Finance 9

10 Commodities and EM assets fall in unison Index, 1 Jan 2000 = 100 Index (reversed scale) Commodity index (lhs) MSCI-EM (lhs) EM FX index Source: Thomson Reuters Datastream, ABN AMRO Group Economics 10

11 EM fundamentals better than in 1990s crisis but FX reserves / short-term external debt Emerging Asia Emerging Europe Latin America Source: EIU 11

12 Fed signalling rate hike cycle will be modest Cumulative rate hikes in first year after first increase, % e Source: Thomson Reuters Datastream, FOMC projections 12

13 Tighter financial conditions holding back EM growth Real M1 money supply growth, % yoy Global Developed Emerging EM real money supply stagnating Source: Thomson Reuters Datastream, ABN AMRO Group Economics 13

14 Is China heading for a hard landing? 14

15 China needs to deal with a debt mountain Total debt to GDP, % Consumer Government FIs Companies Source: McKinsey Global Institute

16 China s great transformation 16

17 Official data point to ongoing China slowdown % yoy % yoy Industrial production (lhs) Fixed investment (rhs) Retail sales (lhs) Source: Thomson Reuters Datastream 17

18 Can we trust the official GDP numbers? % yoy GDP indicator points to 6.6% rather than 7% Real GDP growth (official) Monthly GDP indicator Source: Thomson Reuters Datastream, Bloomberg 18

19 China monetary conditions have turned Index Tighter Easier % yoy Monetary Conditions Index (lhs) Monthly GDP ind. (rhs) Source: Thomson Reuters Datastream 19

20 China: property prices stabilising Newly-built residential building 70 big/medium cities, % yoy Source: Thomson Reuters Datastream 20

21 Implications for the outlook 21

22 Moderate global growth with EM-DM divergence Manufacturing PMI surveys Developed Emerging World Source: Thomson Reuters Datastream 22

23 Modest global growth Economic outlook Global GDP US Eurozone Emerging Asia China World trade Rates and FX Spot US 3-M Libor rate US 10Y Treasury EUR/USD Source: ABN AMRO Group Economics 23

24 China s demand for commodities is slowing Commodity import volumes, 12m rolling, % yoy Copper ore (lhs) Iron ore (lhs) Crude oil (lhs) Bron: Thomson Reuters Datastream 24

25 Oil markets facing supply glut Barrels per day, millions Demand Supply Source: International Energy Administration, ABN AMRO Group Economics 25

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