Charts of the week: Weather, demand, and demographics affect markets in Europe, Asia, and beyond
This week’s charts cover the following data:
Warm weather stops Putin's plan to disrupt European economy with energy cutoffs
Had Putin consulted the weather forecast before invading Ukraine, he might have been better prepared. His strategy of disrupting the European economy by cutting off its energy supply has been thwarted by unseasonably warm weather and strong winds, which have reduced demand and allowed time to secure alternative sources and increase storage capacity.
However, the situation remains precarious. While the chart shows that the Year-To-Date Average Fill Level % is relatively positive compared to previous years, prices are still twice as high as they were before the conflict, and demand from Asia is increasing. Furthermore, the reopening of China's economy will intensify competition for scarce resources. As evidence of Europe's growing uncompetitiveness, companies such as BASF have closed plants.
Will the weather be as forgiving in the future?
Fed chair testimony triggers market correction amid hawkish signals
The recent "good news is bad news" macro story is still unfolding, as Jerome Powell's recent testimony to Congress caused markets to fall sharply. The hope that the recent tightening was coming to an end seemed misplaced, as Powell made it clear that he was prepared to speed up if the steady stream of strong data refused to dry up.
Until recently, federal funds futures were pricing in a rate of around 3% for the start of 2025. However, the continued momentum in the labour market, surging retail sales, and strong CPI and PCE prints released in February seem to be forcing the Fed's hand. As a result, markets are now more hawkish, with a 30% increase in the terminal rate already priced in.
China's modest 5% growth target disappoints investors and hits commodities
As China emerged from its lockdown period, markets had risen strongly in anticipation of its economic resurgence and the pivotal role it could play in driving growth across the region. However, the recent announcement of a modest 5% growth target, the lowest in over 30 years, underwhelmed investors. As a result, commodities were particularly hard hit as demand forecasts were reassessed. With so much riding on China's success, can we hope that they plan to surprise on the upside this year?
Don't forget to subscribe to receive our Charts of the Week email direct to your inbox! https://ow.ly/xk0050NgpQA
领英推荐
Macrobond News
Join our latest webinar: Real estate in a time of rising rates – navigating the correction, anticipating the opportunity
Real estate is among the most sensitive assets to interest rates. With the world’s central banks well into a historic tightening cycle, what happens to one of the most widely held asset classes?
Liam Bailey , global head of research at Knight Frank ,?Carl Gomez , chief economist and head of market analytics at CoStar Group , and?Simon Wallace , global co-head of real estate research and strategy at DWS Group , will discuss the cloudy outlook and potential opportunities.
Listen live to this expert panel of Macrobond users or register to receive a recording of the webinar replay.
Guest blog: What to expect from the Ueda BOJ
Are you curious about what to expect from the Ueda BOJ? According to?Harry Ishihara , a guest blogger and macro strategist, the incoming trio - Mr. Ueda, Mr. Himino, and Mr. Uchida - are expected to fix market functioning.
Stay informed about the BOJ's monetary policy stance and its effects on the economy by reading Ishihara's latest blog post on our website.
One platform. Unlimited insight.
Macrobond delivers the world’s most extensive?macroeconomic?and financial data alongside the tools and technologies to quickly visualise and share insights - via beautiful, dynamic charts and tables.
By putting a world of intelligence at your fingertips, we empower you to make more informed investment decisions, more quickly.
All written and electronic communication from Macrobond Financial AB is for information or marketing purposes and does not qualify as substantive research.
Don't forget to subscribe to our Charts of the week newsletter here: https://ow.ly/QcnB50N8p8w