Leading indicators, oil, geopolitics and sticky inflation
This week's chart covers the following topics:
A potential green light for stalled economies
China was in the headlines in 2023 for an underwhelming rebound, and Britain’s travails post-Brexit are well-known. But according to the OECD, these two nations have improving economic momentum – relative to their own past five-year experience, that is.
This chart tracks the OECD’s Economic Composite Leading Indicator for 17 major economies. In the OECD’s words: it’s “designed to provide early signals of turning points in business cycles,” using future-sensitive economic data points that measure early-stage production and respond rapidly to changing circumstances.
Readings are divided into red, yellow and green based on their percentile over five years. We also added smaller dots to show the six-month trajectory. (We published a similar “traffic light” visualisation for the US in February.)
Exploring the spikes in global stock markets
This chart has a global take on equities, examining mid- and large-cap stocks in 76 countries. Our analysis counts how many countries’ equity markets have reached a rolling 52-week high (in blue) or low (in red).
The resulting “stalagmite and stalactite” visualisation provides an insight into the current, more subdued equity dynamics when compared to the global financial crisis in 2007-09, as well as the panic that followed the outbreak of Covid-19. The two US recessions are highlighted in grey.
The red “stalactites” are spikier than their blue counterparts – suggesting that moments of pessimism are global, but optimism is more local.
Geopolitical events and oil prices
Oil prices jumped immediately after Hamas attacked Israel. As the war escalates, threatening to involve more players in the oil-rich Middle East and potentially complicating energy trade routes, our chart analyses the short-term effects of previous geopolitical events on Brent crude.
Saddam Hussein’s invasion of Kuwait in August 1990 had the most notable effect on oil markets. Less than two months later, prices had doubled.
9/11 saw a very short-term spike, but oil prices quickly began tumbling amid concerns that a recession driven by the attacks would reduce demand.
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Macro Specialist Designation (M²SD) Powered by Macrobond is a study program for financial professionals that offers a deep grounding in macroeconomic analysis. Candidates will have free access to the Macrobond application as they pursue M²SD certification through three levels of exams.
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