The OECD ratio LEI indices for March show that the US Japan Spain and China have readings that are above their trends (ratio to trend index exceeds unity). For EMU the ratio is below unity but it is the same as it was in February at 99.6. The UK ratio to trend reading is still below unity but has been creeping higher. Germany’s reading is stable while France and Germany have been slipping further.

The UK Germany and Greece had been below trend since six months ago. Six months ago China was below trend but it has recovered. Only Greece in this sample has been below trend for over a year and Greece continues to slip lower.

The chart shows the percentage change in the US and China trend restored LEIs on one scale. It is clear that these two nations have been riding the same ups and downs of the business cycle with China at a higher growth level.

This month as China’s export and import results have weakened the US has come up with a set of strong results for exports and imports. Divergent signal are becoming the norm. We are getting some divergent economic signals recently and a number of them come from the various Euro-area members. This month Germany has strong IP and industrial orders while the UK IP index has been weaker. In Italy just today some stronger IP results were reported out. Other indicators have been weaker. We are still trying to sort out the growth trends in Europe and to figure out Greece.

In a recent poll international investors have just responded that over one-half of them expect that Greece will leave the euro.