2020

Thirdrock June Macro Outlook
This month, we revisit the flows of global finance with an acute eye toward the bloodbath has been playing out in emerging economies. We then turn from China, whose early post-COVID-19 data we had profiled last month, to Korea, which is another useful canary in the coal mine for understanding the effects of the coronavirus for midsized open economies. Finally, we discuss the financial crisis that has been underway in Lebanon since the end of last year. - View More PNG pdf_icon_small

Thirdrock May Macro Outlook
This month, we turn from growth and inflation implications of the novel coronavirus (COVID-19) to the bold policy interventions by policymakers worldwide. We also peer carefully at the Chinese experience, to divine clues about the nature of the macro recovery from COVID-19. Finally, we turn to pricing anomalies in oil, which appears to be yet another market to have succumbed to unusual behaviour in recent times. - View More PNG pdf_icon_small

Thirdrock April Macro Outlook
This month, we explore the global inflationary picture in light of the COVID-19 epidemic. We then turn to a star Southeast Asian economy, the Philippines, and caution that recent political developments could undermine the hard-won gains from the past few years. Finally, we look more carefully at the performance of safe assets in response to financial market stresses experienced in the middle of March. - View More PNG pdf_icon_small

Thirdrock March Macro Outlook
This month, we look at the global growth picture, with a keen eye on what the impact of the 2019 novel coronavirus—officially dubbed COVID-19 by the World Health Organisation—could mean for macro prospects, especially in terms of demand. We also take a closer look at the Canadian economy, and arrive at a pessimistic conclusion on both cyclical and structural grounds. Finally, we undertake our usual half-yearly review of macro calls. - View More PNG pdf_icon_small

Thirdrock February Macro Outlook
This month, we look at the flip side of the trade war—at capital flows, especially longer-term foreign direct investment—worldwide, but with a special focus on EMs. We then return to the Euro Area and ask whether the region has bounced back from its doldrums. Finally, we look at the Thai economy, which has struggled over the past decade, and is the main economy outside of China facing a significant coronavirus threat. - View More PNG pdf_icon_small

Thirdrock January Macro Outlook
This month, we look at commodities, but instead of the usual focus on energy and its impact on broader economic activity, we attempt a broader picture that examines unique contributions from different commodity types. We then look at how ASEAN economies—in particular their central banks—have adapted to recent global monetary developments. Finally, we close with a look at Vietnam, specifically asking the question of whether the economy has been a net gainer or loser in the Sino-American trade war. - View More PNG pdf_icon_small

2019

Thirdrock November Macro Outlook
This month, we move on to the most volatile component of GDP: investment. We focus on the comparatively recent post-crisis record on capital expenditures, and also touch on a number of longer-run trends, especially as it pertains to global patterns of saving necessary to fund capital formation. We also return to an examination of cyclical dynamics in the world’s largest economy, with a close look especially at manufacturing and housing. Finally, we close with thoughts on how recent financial markets shocks do not lend themselves to easy analogies to 2008, but nevertheless raise concerns for the efficacy of macro policy. - View More PNG pdf_icon_small

Thirdrock October Macro Outlook
This month, we take a very long view and explore the effects of demographics, and what changes on this front portend for economic prospects. We also return to India, in light of the summer’s elections, and raise some red flags about the economy’s cyclical weakness. Finally, we close with some developments closer to home, looking at how Hong Kong’s future as a financial center may (or may not) be undermined by the recent political unrest.\ - View More PNG pdf_icon_small

Thirdrock September Macro Outlook
This month, we take a deep dive into labour markets. Among both developed (DM) and emerging (EM) markets, currencies are now likely to experience greater movement, owing in part to the trade war but also overall macro uncertainty. While on the topic of macro uncertainty, we examine France, which appears to have successfully navigated its first-half political travails and is now well-positioned to take over Eurozone growth leadership from Germany. Finally, we close with our call review exercise. - View More PNG pdf_icon_small

Thirdrock August Macro Outlook
This month, we take a deep dive into labour markets. Among both the major developed (DM) and emerging (EM) markets, employment remains buoyant, although weaknesses are more prominent in the latter, which tend to be a bellwether for sentiment shifts. Political developments in the United Kingdom also prompt us to revisit the economy’s short-term growth record, alongside a look at how British stocks are doing (not well, in dollar terms). - View More PNG pdf_icon_small

Thirdrock July Macro Outlook
This month, further developments on the trade front compels us to return to the topic of trade tensions and what this may mean for the macro outlook in the event that the conflict becomes entrenched. The largest losers of the war thus far have, surprisingly, been the economies of the Euro Area, and we accordingly consider whether Germany may be an engine that could save the region (we conclude in the negative). And finally, we look at whether Chinese exchange rate policy has played an important role in the trade war thus far, and ask whether it could in the future. - View More PNG pdf_icon_small

Thirdrock June Macro Outlook
This month, we review the year-to-date performance of the major developed and emerging market economies, coming to the conclusion that while first-quarter growth mostly exceeded expectations, the underlying dynamics of growth contributors suggests that this may have been a blip rather than the beginning of a trend. We also take a deep dive into the Russian economy, which has recovered smartly since its recession in 2014–15, and consider whether the almost year-long weakness of the Korean won might reverse anytime soon. - View More PNG pdf_icon_small

Thirdrock May Macro Outlook
This month, we consider the global picture for external balances. Such imbalances were a concern in the run-up to 2008, but they did not turn out to be the distortion that ultimately gave rise to global the crisis. While imbalances are narrower today, certain economies—Germany in particular—are carrying large balances that could be disruptive if unwound quickly. We also look at the short and long-run prospect for Japan, and while we remain sanguine for the short run, we are revising down some of our previous optimism over longer-run prospects. Finally, we also suggest that EM Indonesia’s recent performance have been reasonably solid, although not entirely overlooked. - View More PNG pdf_icon_small

Thirdrock April Macro Outlook
This month, we explore liquidity matters: in particular, we show that central banks are no longer squeezing monetary policy (or reversing it outright), and this has resulted in a possible reversal in tightening financial conditions. We also look at Brexit, from the perspective of forex, and conclude that the prospects for the pound remain in caveat emptor territory, although opportunities could exist for a patient investor by picking up UK assets in the event of a hard Brexit. - View More PNG pdf_icon_small

Thirdrock March Macro Outlook
Although we discussed global inflation patterns fairly recently, the incoming data have moved materially enough to warrant another look; we conclude that price pressures in both developed (DM) and emerging (EM) markets have been relieved sufficiently that a takeoff this year is no longer in the offing. - View More PNG pdf_icon_small

Thirdrock February Macro Outlook
As we discuss in this month’s outlook, global macroeconomic indicators paint a very different picture from that which prevailed at the start of 2018, and with fragile fundamentals, we continue to advise appropriate caution on risk assets. That said, markets that were disfavoured through much of 2018, such as Brazil, now appear to be attractive again, both from an asset front as well as from an economic perspective. - View More PNG pdf_icon_small

Thirdrock January Macro Outlook
Markets renewed their downward pounding in December, albeit with a slight reprieve in the final days of 2018. The heightened volatility leads us to explore tail risks in greater detail. - View More PNG pdf_icon_small

2018

Thirdrock December Macro Outlook
This month, we review financial market developments over the past month or so, with an eye to cross-asset relationships. View More - View More PNG pdf_icon_small

Thirdrock November Macro Outlook
This month, we explore to pressing issue of total debt; not just from public borrowers—beloved among those with an eye on emerging market (EM) sovereign debt—but also the stock of private (in particular, household and corporate) debt. View More - View More PNG pdf_icon_small

Thirdrock October Macro Outlook
This month, developments on the global trade front force us to return to the theme. Rather than focus on either economic implications or political-economy considerations in the bilateral China-U.S. relationship. - View More PNG pdf_icon_small

Thirdrock September Macro Outlook
This month, we take a step back and look at the sustainability of capital flows—which has been in the news lately as emerging markets (EMs) worldwide are experiencing currency pressure—from the perspective of imbalances at the global level, courtesy of recent evaluations issued by the International Monetary Fund (IMF). - View More PNG pdf_icon_small

Thirdrock August Macro Outlook
As the Northern hemisphere presses on into the quiet calm of summer, we review the macro picture of the major developed markets (DMs) over the first half. - View More PNG pdf_icon_small

Thirdrock July Macro Outlook
Earlier this year, we raised the possibility that the prevailing consensus narrative of a “synchronised global expansion” was beginning to show signs of fraying. Nowhere is this more evident than in emerging markets (EMs), where financial outflows from the asset class are now becoming larger and more persistent. - View More PNG pdf_icon_small

Thirdrock June Macro Outlook
Markets calmed noticeably over the past month, which allows us to take a step back and dive a little deeper into one of the fundamental drivers behind several macro themes. - View More PNG pdf_icon_small

Thirdrock May Macro Outlook
Financial markets have remained volatile over the past month, which we consider a “new normal” state of affairs, as the global economy—especially developed markets (DMs)—enters its late-cycle stage. - View More PNG pdf_icon_small

Thirdrock April Macro Outlook
Even by the standards of uncertain financial markets, February was a roller-coaster ride, and after a brief pause for breath, markets again whipsawed in March. - View More PNG pdf_icon_small

2017

Thirdrock Quarterly Outlook – Q1 2017
The Rains of Castamere - View More PNG pdf_icon_small

2016

Thirdrock Quarterly Outlook – Q4 2016
Between a Rock and a Hard PlaceView More PNG pdf_icon_small

Thirdrock Quarterly Outlook – Q3 2016
Winter is ComingView More PNG pdf_icon_small

Thirdrock Quarterly Outlook – Q2 2016
Running to Stand Still – View More PNG pdf_icon_small

Thirdrock Quarterly Outlook – Q1 2016
Too Little, Too LateView More PNG pdf_icon_small

2015
Thirdrock Quarterly Outlook – Q4 2015
Down the Rabbit Hole We Go - View More PNG pdf_icon_small

Thirdrock Quarterly Outlook – Q3 2015
Risk Flares – Mind the Gap! View More PNG pdf_icon_small

Thirdrock Quarterly Outlook – Q2 2015
Guarded Pessimism with Cautious Optimism View MorePNG pdf_icon_small

 

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