Thread by @MacroTechnicals

recap monthly MT GLOBAL M.PMI Aug2019 surveys - Business Confidence vs Markets thread 1/n

• Global business confidence "stable" but < 50
• Uncertainty remains with US China trade dispute
• BREXIT
• growth rates down, disinflation for now

chart1: YoY heatmap = still red

2/n Global M.PMI Aug snapshot in relation to countries' global GDP contribution

3/n global M.PMI Aug survey breadth:

• Momentum NOT gotten worse, slightly up, but still < 50

4/n Global M.PMI Aug snapshot update DM vs EM tables with 5y z-scores & percentiles

5/n Global M.PMI vs DM and EM GDP weighted

• Global 3M high , but still < 50
• DM slightly up , but < 50
• EM 3M high at 50.2

6/n Global M.PMI update Aug vs Commodities ( Energies & Base Metals)

7/n update Global DM M.PMI Aug vs $ACWI and EM vs $EEM yoy basis

8/n moving to regionals : "global big4"

• China 50.4 (5M high)
• US 50.3 (121M low)
• Japan 49.3 (lower)
• Eurozone 47.0 (higher)

9/n regionals: US

PMI vs Stocks $SPX and Bondyields yoy basis

• bonds moved strongly and telegraphed the slower growth, disinflation and has gone a long way now

10/n regionals US vs stock vola

H2 was always on the radar with higher implied volatility, this confirms it yet again

11/n regionals US vs credit risk (yoy changes)

...there are calls for earning "recession", but low cost of money (interest rates already really low) doesn't hurt corps, so at the moment there is no default risk stress, although historically CDS indices could be higher

12/n regionals Canada (just for the record)

• M.PMI dropped to 49.1 3M low
• BoC is watching these data too and will remain dovish and if needed will accelerate rates cuts

13/n regionals: Europe "big4"

• interesting

• Germany still very very weak at 43.5
• France popped up to 51.1
• Italy slightly up to 48.7
• Spain slightly up to 48.8

overall trying to stablise on low levels.

14/n regionals: Germany PMI vs DAX and Bunds YoY basis

15/n regionals: France PMI vs CAC40 and OAT's yoy basis

16/n regionals: Italy PMI vs MIB and BTPs yoy basis

17/n regionals: Eurozone PMI and STOXX vs implied vola VSTOXX

total decouple from the usual correlation vs PMI, and even vs Stock market index surprisingly stable. (IMHO)

18/n regionals: Eurozone PMI and STOXX vs credit risk Itraxx Main yoy basis

19/n regionals: Eurozone PMI and Stoxx vs Itraxx HY Xover and Financials Subs

20/n regionals: UK PMI vs FTSE and GILTs yoy basis

• PMI hit 47.4 (85M low)
• Ireland also hit 48.6 (76M low)

#BREXIT

21/n overview

• global M.PMI = 61% slowdown
• global CBs = 87% dovish
• global 2Y-CB = 83% inverted
• global 2Y-CB = 73% inverted
• global 10Y = 100% flights to bonds on disinflation and lower growth

22/end

US is now catching DOWN to previous weak global PMIs

US contributes quarter of global GDP

FED has hiked too much too quick and despite one cut is way behind the curve

Equities are not cheap if the global uncertainty remains

Vola is poised to be elevated H2 2019

@threadreaderapp unroll thx