Haver Analytics
Haver Analytics


Robert Brusca

Robert A. Brusca is Chief Economist of Fact and Opinion Economics, a consulting firm he founded in Manhattan. He has been an economist on Wall Street for over 25 years. He has visited central banking and large institutional clients in over 30 countries in his career as an economist. Mr. Brusca was a Divisional Research Chief at the Federal Reserve Bank of NY (Chief of the International Financial markets Division), a Fed Watcher at Irving Trust and Chief Economist at Nikko Securities International. He is widely quoted and appears in various media.   Mr. Brusca holds an MA and Ph.D. in economics from Michigan State University and a BA in Economics from the University of Michigan. His research pursues his strong interests in non aligned policy economics as well as international economics. FAO Economics’ research targets investors to assist them in making better investment decisions in stocks, bonds and in a variety of international assets. The company does not manage money and has no conflicts in giving economic advice.

Publications by Robert Brusca

  • The S&P manufacturing PMI indexes improved in November as slightly more countries saw increases than saw deterioration. However, the median gauge slipped slightly on a month-to-month basis. Rather than thinking of the report as being better or worse month-to-month, it seems more productive to recognize how stable the readings have been over the past year, at least in PMI terms. The median readings for 12-month, six-month, and three-month averages across countries/regions are in a range of 48.6 to 48.7 – quite tight. The period-to-period changes are quite small except that the 12-month average compared to 12-months ago shows substantial slippage of 3.4 diffusion points. But since that slippage, the readings have been quite consistent.

    The queue or rank percentile standings have a median at the 24th percentile; however, if we choose to place the monthly observations in a range of high to low, the median is at the 58.4 percentile. I prefer the queue percentile standings, because they include all the observations while the percent-of-range calculations only involve the very highest, the very lowest, and the current observations. The queue percentile standings reveal a few extremely strong readings. Mexico has a 96.2 percentile standing and that is matched by Russia - if you believe that response. India has a 65.4 percentile standing. Indonesia sports a 57.7 percentile standing. South Korea logs a 55.8 percentile standing. All the rest of the standings are below the 50th percentile which places them below their historic medians. The most industrialized and developed countries are giving us the worst readings in November.

    Diffusion measures the percentage of countries where there is improvement; that reading goes to a 61-percent diffusion reading for 12-months compared to 12-months ago. There is also a 61-percent diffusion reading for six-months compared to 12-months and a 50-percent reading for three-months compared to six-months. In the current month the diffusion reading has a 66.7 percent breadth reading implying an improvement in about two-thirds of the observations compared to one-month ago. Breadth is generally improving slowly. The grey highlights in the table flag those observations with diffusion readings above 50. There you can see that readings above 50 have not been sporadic but have been consistent with Mexico, Russia, India, and Indonesia showing readings above 50 on a consistent basis; South Korea shows a reading above 50 in November alone.

    The percentile standings for groups at the bottom of the table reveal that the queue percentile standing for the U.S., the U.K., European Monetary Union, Canada, and Japan is at the 16.9 percentile. BRIC countries are at their 53.8 percentile, while the average for Asia is at its 34.6 percentile. The BRIC readings are considerably influenced by Russia where the economy is believed to be performing poorly although Russia continues to report extremely strong readings. India tends to report PMI values above 50, while China and Brazil tend to report PMI values below 50.

  • GDP trends cooled across the European Monetary Union in the third quarter as updated GDP reports begin to emerge. Quarter-to-quarter growth in the monetary union fell by 0.2% in Q3 after rising 0.6% in Q2. Finland, France, Germany, Ireland, Portugal, and the Netherlands all logged declines in GDP in the third quarter. Of the ten (EMU member and nonmember) countries presented in the upper portion of the table (below), GDP growth decelerates in six of them; in addition, there is deceleration for the monetary union as a whole. The United Kingdom also shows decelerated growth in the third quarter. Pooled together, the four largest EMU economies register deceleration, the rest of the monetary union on its own decelerates, the median for the monetary union decelerates, logging a 0.5% decline in GDP in Q3 after a 1% gain in Q2- decelerations are rampant. The major exception to these trends of course is ‘across the pond’ generated in the United States where 5.2% GDP growth in Q3 trumps a 2.1% gain in Q2. Acceleration lives...but the Fed is quickly seeing deceleration in its wake, a reason to moderate its policy path. We are living in an age of kinder-gentler central banks…for better-or-worse.

    GDP growth rankings are weak- The far-right hand column of the table chronicles the ranking of GDP growth on data since 1997. Among European Monetary Union members, only Portugal has a ranking that exceeds its historic median on this timeline (above its 50-percentile). The median result for the nine reporting EMU members in the table is a standing at the 24.5 percentile, right at the border for the bottom quartile of the historic queue of growth rates. Of course, this stands in marked contrast to United States where its 5.2% growth rate has a 72.7 percentile standing, a standing nearly in the top quarter of all growth rates over the same period.

    Growth rates in the table are color-coded to emphasize slowdowns and speedups. The four quarterly year-over-year calculations for each country or area show a preponderance of red numbers indicating slowdown. GDP growth has been slowing down persistently just about everywhere apart from - you guessed it-the United States.

  • The EU Commission survey for the EMU and its members ticked up to 93.8 in November from 93.5 in October. Still, the overall index has a queue ranking on data back to November 1990 in its 26th percentile. The five component indexes for November showed an improvement in consumer confidence and in construction against a deterioration in the industrial gauge and unchanged month-to-month readings for retail and services.

    In terms of standing, the construction sector in the EMU has a solid 72.8 percentile standing while retailing has held at a 55.4 percentile standing; both are above historic medians. However, the industrial sector ranks in its 26.7 percentile, with services in their 40.4 percentile and consumer confidence even weaker at its 17.9 percentile - all three are below their respective historic medians.

    All five sectors plus the headline continue to reside below their pre-COVID levels of January 2020, a period of nearly four years. The EMU gauge has been below its January 2020 level 72% of the time. Only the industrial sector has been below its January reading less, only about one-third of the time. All other components have been below their January 2020 levels more than 75% of the time over the past nearly four years.

  • The German consumer climate gauge for December 2023 improved slightly to -27.8 from -28.3 in November. Apart from the November reading, the climate reading in December was last weaker in April 2023. From August 2022 to April 2023, climate marked a period in which GfK reading was persistently weaker than it is today, in December. However, apart from this nine-month interval, and the reading for November, there are no other climate readings lower than the current December reading from GfK at any time in the past.

    The climate reading for December has a 3.8 percentile standing, which tells us that it has been this week or weaker less than 4% of the time.

    Weak components and their momentum The components of the climate reading consist of economic and income expectations, and a propensity to buy measure. These components are available with a one-month lag. In November, the economic expectations indicator improved slightly, rising to -2.3 from October’s -2.4. This continued a string of improvements for economic expectations. Income expectations in November, however, slipped to -16.7 from -15.3 that extended a two-month ongoing decline in that indicator. The propensity to buy in November improved slightly to -15 from -16.3; it has been improving very slightly but consistently in recent months.

    Low-ranking component values The ranking of these components remains quite weak. Economic expectations have a queue-standing at their 32.7 percentile in the bottom one-third of their historic queue of readings. Income expectations are much weaker with an 8.7 percentile standing of their queue of data, marking income as in the lower 10% of all readings. The propensity to buy has a 22.4 percentile standing, in the bottom 25th percentile of its historic queue of data. All of these are very weak readings. And while they trail the current December reading for climate in terms of topicality, it's quite clear that the climate ranking is much lower than any of these components and what that tells us is that it's the confluence of weakness among all the components topically that is unusual and is substantially responsible for the extremely weak reading for climate.

    The German economy The Bundesbank continues to look for declines in the Germany economy. The current government has just had a setback in which some of its plans to engaging green spending have been flagged by the courts as inconsistent with their budgetary process and therefore monies that they thought they had set aside for their economic agenda are now going to count towards the budget deficit which will cause the administration to have to scramble and reorganize priorities and spending. At the same time, the war between Russia and Ukraine just continues to drag on mercilessly. While it appears that Ukraine is persisting and possibly even making gains against Russia, as Russia is losing huge numbers of troops due to ham handed strategies, the outcome of the war hangs in the balance and Ukraine's dependence on continued arms provision and the aid from its allies remains as important as ever at a time where some of these allies are beginning to engage in grumbling about how expensive it has been to finance this war and how slow the progress now is going.

    Consumer confidence elsewhere in Europe We can compare the GfK climate figures to consumer confidence for other European countries. France and the U.K. have the most up-to-date readings, with consumer readings that are available through November, only one month behind the GfK reading. In France, the INSEE measure has moved up in November to a 25.9 percentile standing. In the U.K., consumer confidence has moved up to -24 in November from the level of -30 in October, to a standing at its 27.8 percentile. Readings for confidence in Italy lag and are available only through October. Italian confidence has been easing from August to September to October; that leaves the October reading at 101.6 down from 105.4 in September; still, it has a 57.1 percentile standing. Italy has the strongest standing for consumer confidence among this group of countries, but the U.K. and France have similar weak rankings, and Germany comes in with the weakest readings of all, but with component standings more in line with those of overall confidence readings that we see from France and the U.K.

  • Technically the flash PMI readings are slightly stronger month-to-month in more places than they are weaker in November. But the improvements are small. Of the eighteen readings in the table, only six are weaker month-to-month in November, compared to nine of eighteen weakening in October and eleven of eighteen weakening in September.

    Sequentially weak: The sequential readings weakened in seventeen of eighteen readings over three months, in fourteen of eighteen over six months and in fourteen of eighteen over 12 months.

    Some monthly resilience: While monthly data are showing a bit of resilience in November, the sense of rebound is small and the trend weakness is impressively negative. The 3-month change column is relevant here because the sequential data are calculated on averages and only on hard data, not on flash values. So, the 3-month change column in the table is the 3-month change in monthly flash values. On that basis, seven of eighteen observations are weaker over three months - fewer than half of them. Weakness on that basis is across all sectors in France and in Japan. The EMU exhibits net sector weakness in the service sector over three months. The U.K. and Germany show some sizeable improvement over three months on this net basis while the U.S. shows moderate improvements across sectors over three months.

    Weakness is the bottom line: The bottom line for these members, however, is still much more that conditions are weak. Ranked on Data since January 2019, the average composite rank of the six jurisdictions in the table is 24.9%. The average manufacturing sector rank is 12.6%. The average service sector rank is 31.1%. Of course, all these pooled observations are below the 50th percentile, leaving them well below historic median values.

    Sector standings: Among individual country sector rankings only the service sector in Japan has an above 50-percentile standing, at its 61st percentile – no sector in any other country in the table comes close to that. And every sector in every reporter shows a reading lower than its January 2020 level before Covid struck, marking the last four years as having made no net progress in the wake of Covid.

    Evaluating the Covid/post-Covid period: However, evaluating the individual country and sector results, over the past nearly five years, sectors have been above their January 2020 levels only about 48% of the time. The composite indexes were above their January 2020 levels just about half the time. However, the service sector was above its January 2020 level about 53% of the time while manufacturing was above its January 2020 level only about 40% of the time.

    Manufacturing coming under less stress? Manufacturing clearly continues to be hard hit. While manufacturing has improved on the month in the EMU, Germany and the U.K., it has an average PMI ranking only in its 12th percentile. Over 3 months the manufacturing PMI has advanced the strongest- by 4.1 points- in the U.K., by 3.2 points in German, by 0.1 point in the EMU, and by 1.5 diffusion points in the U.S. Manufacturing is weaker over three months by 3.9 points in France and weaker by 1.5 points in Japan. There is a hint of improvement in manufacturing globally, but not much more than a hint.

  • United Kingdom
    | Nov 22 2023

    U.K. Industrial Orders Plunge

    U.K. industrial orders fell to -35 in November from -26 in October. The three-month average of the series is -26, weaker than its -20 6-month average and its -18 12-month average. Conditions in industry continue to deteriorate. The queue standing on data back to 1991 has orders weaker only 11.7% of the time. This is a weak headline for the CBI survey.

    Export orders and the look-ahead to the next three months for output volume both weakened in November. Export orders fell to -31 in November from -23 in October. The outlook for output volume fell to -7 in November from +15 in October. Both export orders and the outlook for volume show ongoing worsening in their sequential averages.

    However, price expectations are rising to +11 in November from +7 in October. That is still below September’s +14. And sequential averages from 12-months to 3-months show that diminished expected prices pressures have, up to this point, ruled the roost. Manufacturing output readings that lag by two months show progressive weakness, with output falling at a 7.1% annual rate over three months. Among the price expectations, manufacturing output trends, and volume expectations, there is evidence of weakening and of lingering inflation pressures. Prices have a 65.8 percentile standing, above their historic median. And despite its recent weakness, the year-on-year growth in manufacturing output has a 60-percentile standing, above its historic median. Some of the signals on growth and inflation remain mixed. Still, there is clear evidence of weakening in progress.

  • European car registrations showed a solid 3.5% month-to-month gain in October; the 3-month moving average rose 3% as well, indicating that there is trend rather than volatility to the increase. Sales/registrations rose month-to-month in three of the five reporting countries. Registrations were up strongly by 9.7% in Spain, up 1.9% in Germany, and edging ahead by 0.2% month-to-month in Italy. Registrations did backdown by 0.2% in October in the United Kingdom and fell month-to-month by 1.5% in France.

    Registrations had fallen in three of five reporting countries in September but had risen in all five of them in August. As always auto registrations data are hard to pin down and remain a volatile source of information on consumer spending.

    Over three months the annual increase in auto registrations is higher in three of five reporting countries; the exceptions are Germany and the U.K. where in each case registrations fall by 5.6% at an annual rate. However, in Spain registrations rise at a 97.5% annual rate over three months; in Italy they rise at an 82.9% annual rate over 3 months; and in France they rise at a 6.5% annual rate. Over six months the annual rate of growth is positive in all five reporting countries and the same trend holds over 12 months. The pace of sales generally accelerates over six months compared to 12 months with France being the sole exception to that phenomenon.

    Year-over-year registrations gain anywhere from 18.5% to 20.4% in Italy and Spain to as little as 5.6% in Germany. But there are increases all around. The growth in sales approach leads to a quite strong and relatively broad and durable assessment of registration trends based upon the growth statistics over 3 months, 6 months, and 12 months as well as the monthly data. And the results for the growth in sales are relatively durable.

    Assessing the sales pace, instead of its growth- However, a broader look at the table begins to uncover some evidence of weakness, for example, looking at the selling pace in October 2023 compared to January 2020, there's a decline of 8.6% for total registrations. In fact, there are declines in four of the five reporting countries with only France showing an increase in the pace of sales as of October 2023 compared to the sales pace in January 2020 before Covid struck.

    • German PPI is weak, but it weakens by less over 3-months that it did over 6-months.
    • European trends show diminishing weakness through September. Weakness concentrates in intermediate goods with consumer goods showing the least weakness.
  • UK nominal sales and sale volume trends create completely different pictures of reality. But surveys join the volume data in seeing pronounced weakness and even the potential for a gathering storm.

    Volume vs value assessments - UK sales values increased by 0.2% in October, but sales volumes fell at the same time; sales volumes have fallen for two-months in a row by -0.3% in October and by -1% in September. Nominal retail sales increased by 2.3% over 12-months and are expanding at a 2.4% annual rate over 3-months, giving the appearance of steady, if somewhat slow, expansion in sales. But retail sales volumes, adjusted for the effects of inflation, show declines of 2.7% over 12-months and a decline at a 3.2% annual rate over 6-months followed by a decline at a 4.1% annual rate over 3-months. Sales volumes are contracting, and the degree of contraction is growing over more recent periods.

    Quarter-to-date - Similarly on the quarter-to-date, nominal retail sales show a 1% increase as sales volumes are contracting at a 5.2% annual rate.

    Turn signals from autos? - Passenger car registrations have fallen for two months in a row, falling by 0.2% in October and by 1.4% in September. The progression of passenger sales registration shows a rise of 11% over 12-months, that accelerates to a very strong 36.7% annual rate over 6-months but then registrations weaken and fall at a 5.6% annual rate over 3-months. In the quarter-to-date passenger car registrations are falling at a 6.4% annual rate.

    Survey results: the CBI UK surveys on retail sales provide some additional perspective on how sales are performing and how merchants tend to view sales trends. -The Confederation of British Industry (CBI) shows retail sales for the time of year falling to a -15 index reading from a + 14 in September. The progression of changes for sales shows a decline of 30 points over 12-months, a decline of 31 points over 6-months, and a decline of 9-points over 3-months. Retail sales for the ‘time of year’ declined by 8 points in October compared to their Q3 average; their October value has a 39.7 percentile standing in its historic queue of responses. On balance these are weak retail signals.
    -The CBI assessment of the volume of orders judging from year-on-year growth rates, plunges to a minus 18 response from plus 18 in September. However, the progression of changes shows this order metric lower by 36 points over 12-months and lower by 38 points over 6-months then higher by 2-points over three months.

    Consumer Confidence - Consumer confidence (also plotted on the chart above) drops to -9 in October from +4 in September. Consumer confidence has been flat, over 3-months and 6-months but is up by 17 points over 12-months. Still, confidence is lower by 4.7 points in October compared to the Q3 average. And its queue standing is in the 15th percentile of its historic queue of results, quite weak.

    Conclusion: Weak! Weak is the bottom line on UK retail sales in October. The nominal signals are copacetic but misleading. Passenger car registrations have a high queue standing in their 81st percentile but show some near-term weakening. Food and beverage spending is holding to high ground as well. But overall nominal sales, and total sales volumes, the CBI metrics, as well as consumer confidence, all score extremely weak readings. Fortunately, inflation in the UK is turning lower - still excessive - but moving in the 'right' direction. Still, there will be no 'relief' from monetary policy anytime soon and, in the meantime, retailing is weakening.

  • The year-on-year trends show that Japan’s nominal imports have weakened significantly since late 2022. Exports have slowed as well, but the import weakness has been more dramatic and has transited to a lasting series of negative year-on-year growth rates. Over the past several months imports have been weakening, shrinking, while exports are growing slowly and the deficit on+ the trade account for goods remains unchanged. Even with reasonably severe import weakens Japan is not making progress in reducing its trade deficit situation.

    Inside the one-year mark looking at nominal export and import growth over six months and three-months we find both exports and imports are gathering pace but, of course, exports are growing faster than imports. Export growth ramps up from 1.5% over 12-months to a 6-month pace of 13.2% and a 3-month annualized pace of 17.4%. Imports that contract by 15.4% year-on-year also recover to a flat performance over 6-months and grow at a 10.8% annual rate over 3-months.

    The yen has weakened over the last 12-months falling by 1.7% Vs the dollar over 12-months and concentrating its decline into the recent 6-months and 3-months when the annual rate of yen decline Vs the greenback is 26% or so. The broad, real effective yen index has also fallen by 2.5% over 12-months and at a faster 12% to 13% annual rate over 3-months and 6-months.

    Real vs nominal trade data and trends And, as is often the case, the nominal and the real data tell very different stories of what is going on here. Export prices rise by 2.4% over 12-months in Japan while import prices drop by 11.6%. Then both export and import prices rising strongly over 6-months and 3-months with import prices rising at a 35.4% annual rate over 3-months and export prices up at a 23% annual rate over 3-months.

    As a result of the divergences in export and import prices, the trends that impact real export and import flows cause the real and nominal flows to look quite different. Real exports and real imports both fall over 12-months with real exports falling by 0.9% and import volumes falling by 4.3%. The import declines step up to show drops at a 10.8% annual rate over 6-months and at 18.1% over 3-months. Export volumes also weakened progressively, but more mildly, falling at a 2.6% annual rate over 6-months and at a 4.7% annual rate over 3-months. Given the weakness in the real flows, the weakness in the yen over this period makes perfect sense to try to ameliorate these trends.

    Of course, one difference between what the nominal and real data show involves the somewhat trivial differences over 12-months where nominal data show weak export growth and more severe import weakness. But then, both flows gain pace over shorter horizons. That’s where real differences emerge. The real flows show declines in both export and import volumes over 12-months and less draconian import weakness, with export volumes weakening mildly but progressively and import volume weakness increasing sharply over 6-months and 3-months. The implications for policy are quite different. Japan is looking like it is further weakening based on what import volumes tell us about domestic demand conditions in Japan. Japan’s economic conditions bear close watching if the real trade data are reliable barometers.

  • Euro-Area IP is falling in September. The declines are broad across industry groups and across EMU member countries. Industrial output has been volatile among the four largest economies in EMU as well. Despite the clear broad weakness in industrial production the sequential growth rates are not progressively deteriorating. Growth for headline production as well As for manufacturing show contractions over 12-months, over six-months, and over 3-months and the contractions over 3-months are greater than they are over 12-months. But there's a slight revival with less weakness over 6-months compared to 12-months preventing a clear path to deterioration from emerging.

    Manufacturing sectors - Looking at sectors in manufacturing consumer durables output fell 8% over 12-months, at 15% annual rate over 6-months and fell at a 10% annual rate over 3-months. Consumer nondurables contracted by 6.8% at an annual rate over 12-months at 10% pace over 6-months and at a 3.5% annual rate over 3-months. Intermediate goods output shows lessening deterioration, as a 4.7% decline over 12-months is reduced to 3.4% over 6-months and is educed to a -2% pace over 3-months. Capital goods output falls by 7.6% over 12-months rises at a strong 23% annual rate over 6-months then plunges at a 9.8% annual rate over 3-months. These are complex patterns. Only capital goods mount any increase in output over any of the horizons, then that rise is reversed. However, there's no persistent deceleration, just scattered ongoing declines that seem to change pace randomly. The chart that plots only year-over-year trends paints a darker picture.

    Quarter-to-date - Quarter to date statistics show headline production excluding construction falling 6.5% at an annual rate in the third quarter, manufacturing output falls at an 11.1% annual rate, drop is led by a decline of 11.9% in durable goods output an 8.8% drop in consumer nondurable goods production, with the immediate goods output falling at a 2.6% annual rate and capital goods output declining at a 3.5% annual rate.

    Output by sector - All the output comparisons by sector show mixed results when we compare the current level of activity to that prevailing in January 2020 before COVID struck. Consumer nondurables output is stronger, capital goods output is stronger, but consumer durables output is weaker, and intermediate goods output is weaker. If we rank the sectors by their growth rates back to 2006 current performance is weak for all the sectors total and industrial production growth has an 8.3% ranking, manufacturing output growth has an 8.8% ranking, consumer durables growth has an 8.8% ranking, consumer nondurables have a 1% ranking and intermediate goods have a 16.6% ranking; capital goods growth has a 10.2-percentile ranking. The growth performance for this past year is quite weak compared with historic norms and you can see what those growth rates are on the table and see by judging the progressive pace of growth conditions haven't improved very much over 6-months or over 3-months.

    The output statistics for countries is similarly weak the reporting remove member countries showing output declining in September except Italy that manages a 0.1% increase in Malta a tiny economy that manages a 1% gain. In August six countries logged output gains month to month well in July output gained in most countries with only six of thirteen showing output declines.

    Industrial growth across countries - Sequential growth rates show that weakness has been pervasive. Over 3-months for example only three countries in the monetary union show industrial output increases, over 6-months only two had increases and over 12-months only two show increases. These metrics reveal the broad nature of weakness in the industrial sector within EMU. Similarly with the third quarter data complete there are only two countries with quarter to date increases in output those are Finland with a 5% increase and Malta with a 4.8% increase.

    Growth rankings - The rankings for the growth performance of countries over the past year compared with their historic standards show every country below its median result except for tiny Malta that has a standing of 51.2%, just a nudge ahead of its historic median that occurs at a ranking of 50%. Greece, another small economy, manages a ranking of its growth rate that is up 2.1% to a 70.7 percentile standing well above its median. In part, that also underscores how little output increased in Greece that a 2% growth rate could have a 70-percentile standing. Ireland is having its worst performance of the entire period, its a year in which output has fallen by 27%. The median percentile ranking among monetary union members is a ranking of 16.1% the average ranking is a ranking at 22.1% both of these show extreme weakness across the Euro Area in the industrial sector.

    There is little in the way of good news in this industrial production report for September. The headline weakness is clear and the weakness spreads across countries and there's little in the report that suggests that this period of weakness is letting up in any way. However, we're at a time where there has been some growing optimism about the US economy gaining its footing and show some inflation progress that an increasing number of market participants are evaluating as evidence that the Fed is done raising interest rates. If that's true, given the size and the importance of the US economy, there could be better news for Europe ahead.

  • Zew metrics showed a weaker economic situation in the Euro-Area this month while Germany strengthened and the US weakened, a mixed picture across these regions. Economic expectations show a stronger Germany and a weaker US performance expected.

    Inflation expectations showed stronger inflation expected in Germany and the Euro-Area. Weaker inflation is expected in the US. Short term rate expectations were weaker in the Euro-Area and weaker in the US as inflation has been coming in and showing signs of behaving. Long term rate expectations fell in both Germany and in the US. Stock expectations month-to-month improved in the Euro-Area in Germany and in the US.

    Economic conditions continue to show rankings well below the 50% mark for the economic situation for Germany for the Euro-Area and for the US. Economic expectations are also well below the 50% level which would mark a neutral reading. Inflation expectations, however, are uniformly low as investors expect inflation to decline from its high level and so the expectations metrics have extremely low percentile standings. Short-term rate expectations are also low because investors basically assume that central banks have pretty much got interest rates where they want them and they look for any further rate changes to be more or less window dressing. This explains why long-term interest rates have exceedingly low percentile standings. Long rate expectations for Germany are at 4.4%, in the US they are at 0.3%. There are few expectations that rates are going rise at this point. And with that expectations have shifted to the stock market where the expectations are closer to or above the 50% mark and investors are beginning to think equities again for better or for worse. Things change...