Back to Business + Reading Chinese Tea Leaves - November G3 Leading Indicator Watch

Update: G3 economic surprises have trended upward in unison, aligning with a consensus shift toward a soft landing and reflation view, and this momentum has room to build. With a decisive Trump win in the U.S. election (likely a sweep), manufacturing activity is free to accelerate, while Chinese policy aims to drive an equity bull market despite fundamental conditions, amid high expectations surrounding the NPC.

Summary by Region:

• US: Growth positive, still slightly below trend growth for now. The consumer is keeping calm and carrying on. Manufacturing is prone for reflation. Labor is slowing, no collapse, microbusiness opening/hire distortions resolving. Inflation likely to level off above target, not high enough for hikes.
• China: Tactically buy equity dips, as policy is unambiguous in trying to engineer an equity bull market. Reading the tea leaves => stick with long USDCNH.
• Eurozone: Cyclical outlook weakening as recovery stalls, service inflation to grind lower. The structural outlook is bleak and could send EURUSD below parity.