Entries from August 25, 2024 - August 31, 2024
German leading indicator also rolling over
Simon Ward
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Next week’s update of the OECD’s composite leading indicators is likely to confirm a reversal lower in the US indicator and a further decline in China – see previous post.
July / August numbers for the OECD’s German indicator can also now be estimated, incorporating Ifo business and GfK consumer survey results released earlier this week.
The German indicator was still on a rising trend as of the OECD’s June update released in early July. Subsequent news suggests that the increase has stalled – see chart 1.
Chart 1
The cross-country deterioration in the indicators is further evidence that a synchronised global downswing is under way.
The baseline scenario here remains that downside economic and inflation surprises will trigger a dramatic escalation of monetary policy easing into H1 2025. A subsequent pick-up in money growth will lay the foundation for a H2 2025 / 2026 economic boom.
