Welcome back to On the Daily, FXDD’s daily research blog. Recently we took a brief break to reorganize some of our internal models and methods to enhance our research process. In addition to updating our models, we are updating our content delivery services. In the coming weeks, On the Daily will be migrating to Substack. You can find the link by clicking here.

In the meantime, here are our latest updates:

  1. Global Economic Momentum turned lower as US Economic Momentum turned lower due to a big miss in Consumer Confidence data. Today, we receive the US pending home sales, which is also a robust pro-cyclical indicator, but our economic forecast implies substantial first differentials through 2021.
  2. Today, we will receive a significant signal on global monetary policy and liquidity, with central bankers from the ECB, Fed, BOJ & BOE all speaking at the ECB’s policy panel discussion. Markets will primarily be using this opportunity to evaluate the divergent stances on the nature of global inflation.
  3. Markets have taken the last month on the chin, with global risk assets having a tough time. However, global commodities and bond markets are sending a more risk-on signal than equities, and given the fundamental backdrop, we expect global stocks to follow suit.

Stay tuned for updates on our Substack launch! In the meantime, here are our data monitors. Let us start with our tracking of global economic momentum:

To add to this picture, here are our global economic cycle, forecast models. A level of 50 implies growth at the local mean, above 50 indicates accelerating economic growth, and below 50% indicates slowing growth:
Next, we offer our Market Environment Monitor, which aggregates the growth and inflation signals from major global investment markets to tell us what the current market environment is, i.e., expansion, inflation, deflation, or stagflation:

Finally, we show our proxy for capital flows using our Currency Bloc Monitor, which aggregates exchange rate moves across 20+ currency pairs into significant regions or Blocs. We offer the evolution of these Currency Blocs over time:

Until tomorrow!