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Macro Monday 40 - Euro Area Composite PMI Macro Monday 40 Euro Area Composite PMI (Released this Thurs 4thApril 2024) The Euro Area Composite PMI (Purchasing Managers’ Index) is a significant coincident economic indicator that provides insights into the current overall health of the eurozone economy. The Euro Area Composite PMI data is collected from a representative panel of around 5,000 manufacturing and services firms around the EU and then a weighted average of the two is provided to create the composite reading. This index tracks variables such as sales, new orders, employment, inventories, and prices. Very similar to the US PMI that we previously covered. The Chart The chart illustrates the following metrics; 🟢Manufacturing PMI (green line) 🔴Services PMI (red line) 🔵Overall composite PMI (Thick Blue Line) The green zone (>50) illustrates the economic expansion zone and the red area illustrates the economic contraction zone (<50). The 50 level itself is neutral. Now, let’s very briefly cover the last three weeks of Macro Mondays No. 38, 39 & todays 40. These all featured the Eurozone economic health and can be valuable metrics to remain informed on. With a click of my charts in trading view you can remain updates with a visual easy on the eye. EU Current Sentiment Outlook (negative but improving) 1.The Euro Area Economic Sentiment Index is based on current sentiment surveys from EU Businesses and consumers for all 27 EU Member States. -The current economic outlook as distinguished by businesses and consumers in the EU is currently below average at 96.3 (<100 is below average and >100 is above average). - We have seen an improvement since Sept 2023 with an increase from 93.4 to 96.3 at present but remain in the negative. EU Forward Looking Sentiment (Firmly Positive) 2.The Euro Area ZEW Economic Index is a 6 month forward looking economists outlook for 20 of the 27 Euro Member states. -The ZEW Index is anticipating optimistic economic conditions for the coming 6 months with a current reading of 33.5 which is well above the historical average of 21.39 on the chart. Economists in then EU see things improving over the coming two quarters. EU Manufacturing and Services current performance composite (Neutral - leaning negative) 3.Featured today, the Euro Area Composite PMI is a coincident indicator offering real-time health of the Eurozone economy through data collected from manufacturing and services firms. -The Euro Area Composite PMI is currently close to neutral at 49.9 (just under the neutral 50 line) demonstrating that over the recent month we have been in marginal contraction in the EU according to the manufacturing/services composite. - However, if we look at the individual Manufacturing PMI we can clearly see we are in negative/contractionary territory at 45.7 (green line) whilst the services PMI is rising into expansionary territory at 51.1 (red line). This is common theme in the US PMI at present also with services performing better than manufacturing sector. The beauty of these charts is that you can go onto my TradingView Page and press update, and the chart will update you with all these metrics, informing you at a glance with how these metrics are performing collectively with a nice visual guide. Thanks again for coming along and I hope this additional Eurozone chart helps you in your current and future understandings of EU Economic Sentiment, Forward looking economists sentiment and how manufacturing and services firms are feeling overall. Bottom line is, economic sentiment appears to be leaning optimistic for the immediate future, however we await more readings for a conclusive trend direction from the coincident indicators, the ZEW Index and the Euro Area PMI index. PUKA
ECONOMICS:EUCOMPPMI
by PukaCharts
CPI % Increase already close to 3 Prior crashes in 1/3rd timeVisualizing CPI within the timeframe of boom and busts. I believe we will continue to melt up in Asset prices as printing still continues and the common investor begins to feel the missed the boat and are getting priced out of the market. They see their buying power deteriorate and will continue to rush to assets i.e stocks. we could see this melt up continue all the way into the first quarter of the next US President Jan 2025.
FRED:CPIAUCSLLong
by AngryBuhda
1
Bitcoin to $1,000,000, This is It. (Breakdown Explained) Well here we are, no recession? no rate hikes? what's going on?. The currency collapse is imminent that's what is going on while majority wait for a recession. No reserve currency has ever survived going past 121% Government Debt to GDP (what about USA in ww2?, this was the start of parabolic technology growth + decrease in spending + war debt repressions (forced). Government Debt + Interest will collapse the currency faster if the FED raises interest rates so this is not a possible outcome unless you want to roll the dice. CPI + Inflation has barely been tamed, FED balance sheet failed to reduce + BTFP. SPY (priced in USM2) has started a new bubble breakout (yes meaning it has just started). Japan raising interest rates means the carry trade is closing (people sell the US Bonds they bought with cheap JPY) adding artificial pressure on the US10Y market. FED raising rates at 121% Government Debt to GDP will send it to 200% faster than you can imagine, a recession? forget it can't be allowed to happen. Theory breakdown what happens next? FED unable to raise rates will start to introduce confidence lost in the dollar that will trigger loss in confidence in US bonds that will require YCC like WW2. When the USA has done this before it equated to the FED needing to get rates back to zero. The FED has an objective to save the US dollar above all means necessary, raising rates in a situation like this on paper makes sense but leads to to a accelerated debt cycle collapse. Jerome Powell's only option was to raise rates fast as possible strengthening the DXY as much as they can flowing all capital globally back into the dollar for risk management. Jerome Powell now must cut rates back to zero and initiate YCC on the US bond market, reinitiate Quantitative Easing to avoid any recession backstopping every market. Inflation must be allowed to run near 20%-100%. Large capital will see this event unfolding and run into assets like Bitcoin & Gold, we already see this and should understand why Spot ETF's and leverage ETF's were rushed to the market pre cuts. If the US bond market fails, global capitalism as we know it today fails. If my thesis was invalidated Jerome Powell would have started multiple more rate hike since I first mentioned this back in late 2023.
ECONOMICS:USCPILong
by FederalXBT
ISM Indices vs. GDP YoY% - Leading Economic IndicatorsBoth ISM Manufacturing Index and Non-Manufacturing Index vs. GDP YoY% for the US economy. ISM Manufacturing: Yellow ISM Non-Manufacturing: Blue GDP YoY%: Green/Red ISM Manufacturing currently signaling contraction with a level below 50 and the momentum seems lower. Non-Manufacturing Index is likely to follow the same path although currently signaling growth, but less than before. GDP YoY% could potentially experience a slow-down within the next 6 Months to a Year. The FED has being somewhat more Dovish on the latest speech, as they're seeing a negative outcome in keeping Interest Rates higher for much longer.
ECONOMICS:USBCOI
by Kels
Rally since 2022 based on Reverse Repo Drain $QQQ $SPY $SPX $NDXThe entire rally since October 2022 has been based on the rapid depletion of the Fed's reverse repo. When the RR drains rapidly, the money flows directly into the stock market. When the RR gains, it precurses a drop in the stock market. At each pivot point the stock market has followed suit. We just had the most recent pivot on March 15th through today adding 43% back to the reverse repo. If this increases further, the stock market should move lower.
FRED:RRPONTSYDShort
by euphoricMeerka49790
Rally since 2022 based on Reverse Repo Drain $QQQ $SPY $SPX $NDXThe entire rally since October 2022 has been based on the rapid depletion of the Fed's reverse repo. When the RR drains rapidly, the money flows directly into the stock market. When the RR gains, it precurses a drop in the stock market. At each pivot point the stock market has followed suit. We just had the most recent pivot on March 15th through today adding 43% back to the reverse repo. If this increases further, the stock market should move lower.
FRED:RRPONTSYDShort
by euphoricMeerka49790
House Prices have likely reached a topParty's over. Now comes the bill. Housing prices have experienced an artificial inflated price surge from march 2020 that needs to be corrected. RSI sell signal MACD just crossed the signal and it's bound to change direction. Stochastic RSI at virtual 0 also signals a possible change to a bear market that is still yet to occur, which often happens at a second bounce to a lower high. First target is 345. Using 2008 as reference price index can go as low as 310, to the 0.38 retracement, however back then - from the shock reaction to the bubble bursting - we didn't experience the recession we would have had if the Fed didn't eased the economy, quantitatively speaking, if you know what I mean. If the Fed lets the house market drive its natural course, and if we experience a deflationary economy in the mean time, I wouldn't be surprised if we went as low as 290 or 260 on a longer term. DYOR
ECONOMICS:USHPIShort
by Zerkaalo
Macro Monday 39 - Euro Area Economic Sentiment Indicator (ESI)Macro Monday 39 Euro Area Economic Sentiment Indicator (Next Release is this Wednesday 27th March 2024) Last week we covered the the Euro Area ZEW Economic Sentiment Index (the "ZEW Index") and learned that the sentiment data for the ZEW Index comes from 350 economists spanning the Euro Area (20 of the 27 EU member states that use the Euro currency). The ZEW Index attempts to provide a sentiment lead with economists factoring in their 6 month forward projections into the sentiment data. This week we look at a different more current sentiment indicator, the Euro Area Economic Sentiment Indicator (ESI). The data for the ESI is derived from the businesses and consumers of all 27 EU Member States. The ESI therefore has a larger data set to the 20 countries covered in the ZEW Index. The ESI is closer to the truth of what businesses and consumers are currently experiencing on the ground across Europe. The ESI is not forward looking like the ZEW index, the ESI should be considered a coincident indicator presenting the current state of economic sentiment among businesses and consumers across the EU. In any event we can still use the ESI data and the chart to identify trends and to know where sentiment stands when it is released each month. Interestingly, at present the ESI figure is more negative than the ZEW Index. The ZEW is in positive sentiment territory (forward looking) whilst the ESI is firmly in negative sentiment territory (current outlook). Based on each data sets objective, you would think that the ESI would move into positive territory over the coming 6 months based on the forward looking positive ZEW Index. No guarantees of course. We can watch this as it plays out in real time and see if the ESI follows the ZEW Index. Lets have a closer look at the ESI The Euro Area Economic Sentiment Indicator (ESI) is a measure created by the European Commission to gauge economic confidence across the Euro Area. The survey data for the Economic Sentiment Indicator (ESI) is initially collected at the national level for each country within the Euro Area. These individual country results are then aggregated to create the overall ESI, which reflects the economic sentiment for the entire EU (all 27 countries). The data is also seasonally adjusted to account for regular seasonal variations and provide a clearer picture of the underlying economic trends. The data is derived from survey responses from the following economic sectors in each country (with weightings); 1. Industry (40%) 2. Services (30%) 3. Consumers (20%) 4. Retail (5%) 5. Construction (5%) Balances are constructed as the difference between the percentages of respondents giving positive and negative replies. The ESI data is scaled to a long-term average of 100 with a standard deviation of 10. This means that the average sentiment over time is set at 100. As the ESI’s scale centers around a mean of 100 values above this suggest higher-than-average confidence, while those below indicate lower confidence. It’s seasonally adjusted to reflect consistent economic trends. The Chart (above subject chart) The chart follows the structure discussed above and we have split the chart by color as follows: >100 = Above Average Economic Sentiment🟢Green <100 = Above Average Economic Sentiment🔴 Red ▫️ As you can see on the chart we made a record low in pessimism in May 2020 at 58.7 which was closely followed by a record high in optimism in Oct 2021 at 119.5. ▫️ The chart has arrows that are 17pts in length. You will see the arrows across the chart whereby if there was a greater than 17pt drop from the green zone into red the red zone, this historically has coincided with recession ▫️ The most recent drop from🟢119.5 in Oct 2021 to 🔴93.9 in Oct 2023 is a drop of 25.6pts, greater than the 17pt typical recession drop. "This time might be different" may actually apply because we had all time highs in sentiment in Oct 2021, however that does not detract from the fact we are currently firmly in negative economic sentiment sub 100 at 95.4. ▫️ You can see that any time we have fallen below the 85 level (red dotted line) we have confirmed a recession. This does not mean that you need a sub 84 reading for a recession, only that when this has occurred in the past, it only occurred during some of the deeper recessions. A quick note on the Euro Area terminology as this was bugging me as the ESI covers all 27 EU member states Euro Area Terminology? The term “Euro Area Economic Sentiment Indicator” can be somewhat misleading because the ESI indeed covers all 27 EU Member States, not just those in the 20 in the Euro Area or Eurozone. The name likely persists because the ESI is particularly significant for the Euro Area, where economic policies are closely aligned and the shared currency means that economic sentiment has direct implications for monetary policy. However, the ESI’s broader EU-wide scope allows for a comprehensive view of economic sentiment across the entire European Union, which is valuable for comparative analysis and policy-making at the EU level. Thank for coming along again, if you like the content and find it informative please let me know PUKA
ECONOMICS:EUEOI
by PukaCharts
2
Interest Rate Cuts 3 Times This Year May Not Happen - Here's WhyMany interpreted from the latest FOMC meeting that the Fed is going to have three rate cuts this year, but Jerome Powell did not say that. Let me quote directly from his transcript: “If the economy evolves as projected, the median participant projects that the appropriate level of the federal funds rate will be 4.6 percent at the end of this year” And he added: “These projections are not a committee decision or plan” In today’s tutorial we will discover why so many of us got it wrong in what he is trying to tell us. And who are these participants? 10-Year Yield Futures Ticker: 10Y Minimum fluctuation: 0.001 Index points (1/10th basis point per annum) = $1.00 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
FRED:FEDFUNDSLong
by konhow
2
Macro Monday 39 (Part B) - Predictive Power (EU ZEW Vs EU ESI)Macro Monday 39 (Part B) This chart is a summary of the past two weeks of work in Macro Mondays on the EU Sentiment The Chart illustrates the forward looking Euro Area ZEW Sentiment Index (red line) and the current sentiment outlook via the Euro Area Economic Sentiment Index (the "ESI", the blue line). In the chart I have used thick orange lines to illustrate when the forward looking ZEW Index moved negative ahead of the ESI Index. I have used thick green lines to inform of us of when the ZEW Index moved into optimism ahead of the ESI Index. The Chart demonstrates that the ZEW Index is actually a moderately decent forward looking indicator. Hats off to those 350 economists that complete the surveys in the ZEW Index. Whilst it has been great at providing some leads, the ZEW Index is not always accurate and does not always offer the correct lead direction however historically we can see that it certainly has had predictive power at certain junctures and thus its a useful data set to monitor for EU sentiment. ▫️ At present the forward looking ZEW Index has moved into optimism whilst the current outlook via the ESI is in pessimism. ▫️ If the ZEW Index gets above the 38-42 level, it would really help concrete the sentiment shift to optimism. This is not disregarding the fact we are firmly in positive forward looking sentiment territory already. Historically there have been many rejections lower from this 38 -42 level, thus getting above it would be a real conclusive move. Furthermore, the ESI is at 95.4, if the above were to occur with a move above 38 - 42 on the ZEW Index and the ESI was to move above 100 into positive territory, we could really start to lean firmly positive for the present and into the future. The beauty of this chart is that you can go onto my TradingView Page and press update, and the chart will update you with both metrics, informing you at a glance with how these metrics are performing collectively with a nice visual guide. Thanks again for coming along and I hope this chart helps you in your current and future understandings of EU Economic Sentiment, which is an important global economic lead. Bottom line is, economic sentiment appears to be leaning optimistic for the immediate future, however we await more readings for a conclusive trend direction. PUKA
ECONOMICS:EUESI
by PukaCharts
Diesel prices Retail Diesel – Monthly: Currently resting at monthly support of 5.31. (Ichimoku indicator not shown) Daily and weekly swings above and below the blue Tenkan line should be expected. A monthly close below could open the door to the red Kijun line at 4.09. This would be very strong support on a monthly scale. There was a 5 leg event from the 02’ low to the 08’ high. Leg 1 climbed 80% in under 2 years. The 3rd leg high climbed 230% higher in over 6.5 years. The 5th leg high climbed 390% off the 02 lows in just over 9 years. The 16’ low to the 18’ high (Leg 1) climbed 75% in under 3 years. The current (3rd leg) high climbed 190% off the 16’ lows in under 6.5 years. If Diesel can break the trendline above $6.00, historically speaking $9.00+ diesel is not out of the equation… Price risk on higher diesel is warranted. What broke the last strong run higher was the great 08’ recession…
FRED:GASDESW
by mtb1980
⚡️ INFLATION IN THE US WILL GO TO THE SKY 🚀🚀🚀📣 Hello! I believe that inflation in the US will not go anywhere and the 2% target that the Fed has set for itself will not be achievable anymore. Here is a 100-year triangle on the CPI chart and I believe that already in this decade, that is, until 2030, it will be broken up and the Fed will have very big problems. After the triangle breaks up, inflation will soon exceed the peak of the 80th year and soar to 18-20%, then after the correction we will see a new ATH, it will be just inevitable. We can hope, of course, that everything will be fine – no one forbids this to you or me. But we have to be ready for the worst times right now, that's my opinion. ⚠️ Please analyze the information received from me and always think first of all with your own head. I wish you good luck in making your own trading decisions and profit ✊ Bye!
ECONOMICS:USIRYY
by AnonymousTraderAcademy
4
$JPIRYY -CPI (YoY)ECONOMICS:JPIRYY Japan Inflation Rate Lowest in A Year The annual inflation rate in Japan fell to 3.0% in September 2023 from 3.2% in August, pointing to the lowest reading since September 2022. Meantime, core inflation rate dropped to a 13-month low of 2.8%, slightly above market consensus of 2.7% while staying outside the Bank of Japan's 2% target for the 18th month. Core inflation rate dropped to a 13-month low of 2.8%, slightly above consensus of 2.7% while staying outside the Bank of Japan's 2% target for the 18th month. On a monthly basis, consumer prices rose 0.3% in September, after a 0.2% gain in August. source: Ministry of Internal Affairs & Communications source: Ministry of Internal Affairs & Communications
ECONOMICS:JPIRYY
by Mr_J__fx
Macro Monday 34 ~ S&P PMI Composite FlashMacro Monday 34 S&P PMI Composite Flash This S&P PMI “Flash” Composite is a very useful and relatively new data set made available since Nov 2013 that is particularly useful at providing an advance indication of the ISM Purchasing Managers Index (ISM PMI Index) which is released a week later. We are aware from prior Macro Mondays that the ISM PMI index is based on data collected through surveys of over 800 companies in the U.S. and covers variables such as sales, new orders, employment, inventories and prices, all of which give us an indication of trends in the economy. S&P Flash Composite Main Benefits 1. The term "Flash" in the name refers to the fact that it is a preliminary or early quick estimate of the ISM Purchasing Managers' Index (PMI) which is released later in the month. For example this month the S&P Flash Composite is released this week on Thursday 22nd Feb whilst the final ISM PMI reading is released Friday 1st March (both readings are for the month of Feb). 2. The S&P PMI Composite Flash is a “composite” insofar as it combines both the manufacturing and services sectors PMI’s into a single index. This provides a more comprehensive overview of economic activity compared to looking at either sector in isolation (however you can also view the flash PMI for Services and Manufacturing separately, these are released on the same day). So the S&P PMI Composite Flash consists of two main components: 1. Manufacturing PMI: Measures economic activity in manufacturing. 2. Services PMI: Measures economic activity in the services sector. Both components are based on surveys of purchasing managers and provide insights into factors like new orders, production, and employment. The Composite PMI combines these components to offer an overall picture of economic health, with readings above 50 indicating expansion and below 50 indicating contraction. How do we get an advance “FLASH” PMI reading and how reliable is it? The main difference between the data used in the S&P PMI Composite Flash and the final PMI figures lies in the sample size(smaller) and timing (earlier release with most recent data exclusion). According to Investopedia and a report from S&P Global Flash (Jan 2023), the Flash Composite PMI release is based on about 85% of total PMI survey responses each month. Clearly, a significant portion of survey responses are included in the Flash PMI which would lead you to believe that its reliable early indicator but how reliable has it been historically? In the aforementioned S&P Global Report it also provided the historical average difference between the flash and final PMI index values (final minus flash) since comparisons were first available, which are; Composite Difference = 0.1 Manufacturing Difference = 0.0 Services Difference = 0.2 We can see that the Manufacturing Flash PMI release readings are the most reliable and that the Services Flash PMI is less reliable. Whilst both are not far off the mark, it’s a notable difference for services considering that services represents over 80% of Gross Domestic Product (GDP), thus small differences in services hold more weight. Regardless, we can be relatively satisfied that the S&P PMI Composite Flash Index is a very good and reliable early indicator of the Final ISM PMI. I will certainly be looking at this metric going forward so that I can have a great early indication of the ISM PMI. When you review the chart of the Flash PMI with the Final PMI, you'll see that the difference appears greater than the marginal difference discussed above. This highlights, how on a chart, the difference a week or a weeks worth of data can make to how a chart appears (with the absent or included 15% of data). You will also notice that the Flash PMI is more volatile with higher and lower swings. It reminds me a little of the CPI headline vs CPI core chart in this respect, as both ultimately move in the same direction but one oscillates less than the other. I hope the next Flash PMI released this Thursday 22nd Feb will help arm you with what is very reliable early indication of the ISM PMI (released a week later on the 1st March). Thanks for coming along PUKA
ECONOMICS:USCOMPPMI
by PukaCharts
U.S. Initial Jobless Claims (Updated Chart with todays release)U.S Initial Jobless Claims Rep: 187k ✅ Lower Than Expected ✅ Exp: 207k Prev: 203k (revised up from 202k) A positive release today with initial claims coming in much lower than expected. Chart Trend We are very close to taking out the lows from Oct 2022 at 180k claims on the chart. Importantly these charts do not update with revised figures and factoring in revised data the low was 167k in April 2022 (a little earlier and a little lower). In any event these sorts of lows in Initial Claims have not been seen since May 1969. Recession Watch The chart below has min, avg and max levels on the bottom left to illustrate the levels we would need to hit for increased recession risk. Right now this chart has not demonstrated increased risk. We need be careful and watch for the average increase of 71k pre recession as illustrated on the chart. Lets see what next months reading informs. Continuous Claims up Next 💪🏻
ECONOMICS:USIJC
by PukaCharts
1
Continuous Jobless Claims in High Risk Territory U.S. Continuous Jobless Claims Rep: 1,906k 🚨Higher than Expected 🚨 Exp: 1,889K Prev: 1,898k (revised down from 1,905k) Continuous claims came at 1,906k which is 8,000 higher than last weeks revised 1,898k. The Trend Since Sept 2022 continuing claims have increased from 1.302m to 1.906m (604k+). This is significantly concerning trend & suggests that an increasing number of people that have become unemployed are remaining unemployed for longer. Short Term Trend ~ Weekly Chart - FEATURED CHART Long Term Chart Trend ~ Monthly Chart - SEE BELOW LINK Recession Watch Both charts above have min, avg and max levels on the bottom right to illustrate the levels we would need to hit for increased recession risk. Right now this chart demonstrates we are at max timeframe and close to max levels for an advance recession warning. PUKA
ECONOMICS:USCJC
by PukaCharts