Chart of the Week and Weekly Report Highlights

This week: big themes for the year ahead, bond yields, gold positioning, EMFX and EM bonds, growth outlook, inflation, and key risks to global equities...

Apr 06, 2022

Welcome! This email provides a look at what we covered in the latest “Weekly Insights report” — which is part of out new entry-level service. The entry-level service presents some of the key findings from our institutional research service, providing an entrée experience (in terms of price and size).

Chart of the Week - Global Policy Pivot

Monetary Policy from Tailwind to Headwind: Last year I counted 123 rate hikes across 41 central banks… meanwhile already so far this year I’ve counted 67 interest rate hikes across 45 central banks, with the majority of central banks globally now well into rate hike mode.

EDIT (5-May): the YTD count is now ~100 hikes, and over 50 central banks hiking rates.

The latest big new arrival to the rate-hike club was of course the Fed, and most expect a fairly aggressive hiking cycle; potentially with QT starting soon. Incrementally this will all present increasing headwinds to global growth and risk assets.

EDIT (5-May): the Fed has announced QT (starting 1 June).

Indeed, the chart below tracks the net-number of central banks in rate cutting vs rate hiking mode. It maps out the clear policy pivot that occurred last year, and which accelerated this year: towards interest rate hikes and stimulus removal.

If we take this chart literally, the global manufacturing PMI looks set to drop below 50 by the end of the year. Not sure how many 2022 outlook pieces had that on their list!

Key point: The global monetary policy pivot presents clear headwinds to growth.

— UPDATE — 14 Sep 2022

As of the latest data, I now count over 230 rate hikes across 80 central banks.

And since I just pointed to this charticle from another post, here is that chart above updated to the latest and not so greatest data:

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Topics covered in the latest Weekly Insights Report:

Global Growth Outlook: shifting sands: upside, downside, risks.
US 10yr Bond Yield: another break higher after a brief consolidation.
Commodity Currencies: going from strength to strength, esp. EMFX.
Gold Sentiment: clear upshift in flows and positioning, the chase is on.
EM Bonds: an overlooked, unique, and interesting corner of the markets.
Prices & Policy: surging inflation threatens to derail the fragile global recovery.
Global Equities: risk signals and valuation metrics to keep an eye on…

Subscribe now to get instant access to the report so you can check out the details around these themes, as well as gaining access to the full archive of reports.

QUARTERLY STRATEGY PACK - Q2 2022

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>> Upgrade to the “Add Quarterly“ plan to get a copy of this slide-deck (which covers the big picture macro outlook, key risks to navigate in the months ahead, main asset allocation calls, and a selection of interesting ideas) AND join the webinars next week to go through the slides + Q&A. Sign up Now ↓↓↓

Thanks for your interest. Feedback and thoughts welcome.

Sincerely,
Callum Thomas
Head of Research and Founder at Topdown Charts

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