JPMorgan Econ FI-Global Data Watch Fighting fear, questioning hope-108620050.pdf

GlobalEconomicResearch07June2024JPMORGANwww.jpmorganmarkets.comContentsUS:Lookingatbothsidesoftheinterestincomeledger13BoE:Reasonsnottostopactivegiltsales15Africa:Leavingstressbehind18GlobalEconomicOutlookSummary4GlobalCentralBankWatch6EconomicActivityTracking8SelectedrecentresearchfromJ.P.MorganEconomics10J.P.MorganMarketWatch11DataWatchesUnitedStates21Focus:Expectdownwardrevisionto(lagged)payrolls28Euroarea29Japan35Canada38Mexico40Brazil42Argentina44Andeans46UnitedKingdom48EmergingEurope50SouthAfrica57SSAFocus:Zambia’sBoPlooksmanageable59AustraliaandNewZealand60China,HongKong,andTaiwan62Korea66ASEAN68India72Asiafocus73RegionalDataCalendars74EconomicandPolicyResearchBruceKasman(1-212)834-5515bruce.c.kasman@jpmorgan.comJPMorganChaseBankNAJosephLupton(1-212)834-5735joseph.p.lupton@jpmorgan.comJPMorganChaseBankNANoraSzentivanyi(44-20)7134-7544nora.szentivanyi@jpmorgan.comJ.P.MorganSecuritiesplcGlobalDataWatch•SupportforbroadergrowthinMayglobalPMIandUSjobsreport•FedeasenotexpecteduntilNovember•ElectionsurprisesgeneratedgreatestuncertaintyforSouthAfrica•NextWeek:Fedtrims2024easing;firmUScoreCPI;BoJstartsQTFightingfear,questioninghopeOur2024narrativecanbecharacterizedasapush-backagainstgrowthfearsanddisinflationoptimism.WhileanticipatingaUS-leddownshiftinglobalGDPgrowth,wehavedownplayedtheriskofamaterialnear-termthreattotheexpansion.Indeed,theglobalexpansionisexpectedtomoveontofirmergroundin1H24asgrowthbroadensacrossregionsandsectors.Atthesametime,weareskepticalofthewidespreadoptimismforanimmaculatedisinflationthatopensthedoorforsignificantcentralbankeasing.WeexpecttheglobalandUSeconomiestoendtheyearclosetowheretheybegan–withcoreCPIrisingataroughly3%ar.InaweekthatsawtheECBandBankofCanadastarteasing,incomingdatapointstoalimitedwindowforcentralbankratecuts.Thisweek’smostdecisivenewscamefromourall-industryglobaloutputPMI,whichmovedupfortheseventhstraightmonthinMay.Althoughwediscountthesurvey’ssignalthatglobalgrowthisrunningatarobust3.4%arpace,weputconsiderableweightonthesectoralandregionaldetailsofthesurveythatpointtoaglobalexpansionlessreliantonaUSdemandengine(Figure1).Inaddition,thereareencouragingsignsthattheexpansionintheglobalmanufacturingsectorisbroadeningbeyondthetechexportingAsianeconomies.TemperingthePMIsignalofacceleratingGDPgainsaresofteractivityreadingsintheUSandChina.TheUSslowdowntoaprojected1.7%argainin1H24iscominglargelyfromtwoanticipateddevelopments—afadingfiscalstimulusandbuildingnettradedrag.Throughthisslowing,supportforsustainedUSexpansion4650545820202021202220232024DI,saFigure1:OutputPMISource:S&PGlobal,J.P.MorganEMmfgEMservicesDMmfgDMservices-4-20246810121718192021222324%changeover6months,saarFigure2:USservicesectoremploymentSource:BLS,J.P.MorganProf.servicesTransport&warehous"gL&HTechEdu&healthSeepage83foranalystcertificationandimportantdisclosures.2BruceKasman(1-212)834-5515bruce.c.kasman@jpmorgan.comJPMorganChaseBankNAJosephLupton(1-212)834-5735joseph.p.lupton@jpmorgan.comNoraSzentivanyi(44-20)7134-7544nora.szentivanyi@jpmorgan.co