Bending but not breaking - August G3 Leading Indicator Watch
The highest effective US tariff rates in more than century have so far only resulted in stalling US job growth but not (yet) broader layoffs or higher prices. As long as the labor market holds up, we would be looking to add to risk assets in the coming months given the favorable global liquidity backdrop.
Summary by Region:
- US: Most coincident data are resilient despite the weakening labor market, so the base case remains “muddle through” until data prove otherwise.
- China: Leading indicators are still improving, but a weak housing market and other structural headwinds mean there is no major reflation on the cards.
- Eurozone: There are more signs the growth rebound is gaining momentum, but real yields still look too high given inflation is rolling over.
Leading Indicator WatchCyclicalUSChinaEurozonenoramapaceuDMEMAsset AllocationGlobal Macro TradingSingle StockGrowthInflation