US Outlook Still Benign; China Rally is the Triumph of Hope over Experience - October G3 Leading Indicator Watch

Update: US labor market data is consistent with a growth slowdown, NOT a recession, as the negative data revision trends have shifted positive. Chinese Equity rally is the triumph of hope over experience… but we are keeping an open mind. Key data we are tracking to see if this is a real economic recovery: NBFI trend, savings vs demand deposits, hiring surveys.

Summary by Region:

• Global: growth picture ex-China was benign, wait & see on China LEI.
• US: growth is positive, slightly below trend. Labor slowing, no collapse, Oct NFP shifts data revision trends. Not fully out of the woods yet on inflation, shelter CPI more resilient. Manufacturing has recovery potential once election uncertainty clears.
• China: equity rally is the triumph of hope over experience… but keep an open mind. Key data we are tracking to see if this is a real economic recovery: NBFI trend, savings vs demand deposits, hiring surveys.
• Eurozone: cyclical outlook slowing, Germany still bad outlier. Service inflation risks still muted, this remains key, SOFR-euribor pricing out hawkish ECB.