Despite the ISM figure for May showing weakness, there are numerous signs from both the market and forward looking indicators that we are in for a substantial boom in manufacturing. What should you buy if that’s the case? Find out here.
Something for your Espresso: On a BOAT towards a recovery
The ISM manufacturing number keeps printing at weak levels, but it remains out of whack with the economy. Meanwhile, the Atlanta Fed nowcast weakens materially ahead of the ISM Services print.
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The Week at A Glance: The comeback of the (growth and inflation) cycle
We expect the release of ISMs and labor market data to rhyme with an increase in activity in May relative to April. The ECB meeting will likely be mostly about buying time after the (almost) pre-announced cut.
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Something for your Espresso: Is Powell right?
The US economy is probably accelerating. The ISM PMI defied weak seasonality and the orders to inventories. Will the NFP defy seasonality gravity today as well?
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US rates nugget: 4 charts on why November data will reignite the hawks
The USD weakness has been striking over the past trading week. Markets have extrapolated the softness in the US CPI from October, but is it fair? US data could perform strongly until New Year’s due to seasonality.
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Something for your Espresso: It’s either recession or restocking from here
Most of the signals from our models hint that the weakness through October was a data glimpse and that 2023 will end on a strong seasonal note before a weak 2024. Either we are right or else recession is looming.
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Services Nugget: How do the Central Banks react?
We are well under way in our Services Week with our focus on Services and in this note we wanted to highlight the issues central banks could face in a scenario in which manufacturing outpaces services.
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5 Things We Watch – ISM, Energy, German manufacturing, US labor market, Global Rates
Our services week is hot and running, where we share our take on the rebound in manufacturing amidst a weakening in the services sector. Today we will share some of the takes we have looked at, as well as what lies ahead
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Services Week: What to buy if manufacturing rebounds while services weaken?
We have run the numbers on historical correlations between the US PMI spread and various asset classes to find out what you should buy if manufacturing rebounds while services weaken.
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Something for your Espresso: Month-end or trend?
The EURUSD reversal on the back of hot inflation in Europe was a surprising move, but one we fancy. The Chinese stabilization is walking a tightrope despite efforts from the authorities to prop up CNY asset values.
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ISM Nugget: A yuge Manufacturing surprise in store for us?
Our indicators suggest that ISM Manufacturing may suddenly accelerate faster than thought possible… A cyclical upswing on the cards in the US? Watch out tomorrow.
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Something for your Espresso: Everything you better watch while ISM Manufacturing rebounds
There are admittedly early signs that the Manufacturing sector rebounds in the US with the Dallas Fed PMI confirming the stabilization narrative. We tend to agree on the direction of travel in Manufacturing, but here is everything you need to watch outside of that sector.
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Out of the Box #13: Services matter for central banks and Manufacturing for markets
If the service industry starts to fade relative to the Manufacturing sector, it may be exactly what central banks use as the excuse to pause (and eventually pivot) but markets are much more sensitive to Manufacturing PMIs.
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Something for your Espresso: The melt up continues
Nikkei at 33-year highs again this morning as the melt-up continues. Falling inflation outpaces mediocre liquidity -and growth outlooks, which goes to show how a rapid disinflation can be seen as manna from heaven initially.
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Something for your Espresso: The FDIC remains worried, while China is bouncing..
Was it too early to burry the Chinese rebound? Manufacturing is now showing signs of life. Meanwhile, the FDIC sounds worried about the health of the US banking system in their quarterly report. Expect a stinker in the ISM Manufacturing report today.
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Something for your Espresso: Nothing happening is bond bearish
As long as “nothing happens” it is bond bearish as it alleviates fears of an immediate recession. Recent data is not bad enough to prompt further bond buying as of now.
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Something for your Espresso: Prices paid are rebounding
The ISM Manufacturing was the worst possible cocktail on the surface but remember the time-lags from the survey to actual activity. Inflation is likely to rebound later in the year, but not for now.
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