{"id":4656,"date":"2023-04-13T14:43:40","date_gmt":"2023-04-13T14:43:40","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=4656"},"modified":"2025-03-27T15:50:39","modified_gmt":"2025-03-27T15:50:39","slug":"global-monetary-relapse-ominous-for-h2-prospects","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=4656","title":{"rendered":"Global monetary relapse ominous for H2 prospects"},"content":{"rendered":"<p>Partial information indicates that global (i.e. G7 plus E7) six-month real narrow money momentum fell for a third month in March, possibly breaching a low reached in June 2022. This increases confidence that a recent recovery in PMIs will reverse into H2.&nbsp;<\/p>\n<p>The June 2022 low in real narrow money momentum presaged a low in global manufacturing PMI new orders in December &ndash; see chart 1. Assuming the same six month lead, the roll-over in real money momentum since December 2022 implies a PMI decline from June.&nbsp;<\/p>\n<p><strong>Chart 1<\/strong><\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/130423c1.png?__SQUARESPACE_CACHEVERSION=1681397263819\" alt=\"\" \/><\/span><\/span><\/p>\n<p>The fall could start earlier. The recovery in real money momentum between June and December 2022 was minor and driven entirely by a slowdown in six-month consumer price inflation. Momentum failed to break into positive territory. Credit tightening due to recent banking stresses may accelerate economic weakness.&nbsp;<\/p>\n<p>The renewed fall in global real money momentum since December reflects nominal money weakness rather than any inflation rebound: the six-month rate of change of nominal narrow money appears also now to be negative, a feat never achieved during the GFC &ndash; chart 2.&nbsp;<\/p>\n<p><strong>Chart 2<\/strong><\/p>\n<p><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/130423c2.png?__SQUARESPACE_CACHEVERSION=1681397296204\" alt=\"\" \/><\/span><\/span><\/p>\n<p>Nominal money contraction is being driven the US and Europe, with momentum positive and stable in the E7 and Japan.&nbsp;<\/p>\n<p>Global real money momentum will be supported by a further inflation slowdown but a significant recovery is unlikely without a policy reversal that revives nominal money growth. As previously <a href=\"https:\/\/moneymovesmarkets.com\/journal\/2023\/3\/17\/emergency-lending-isnt-monetary-easing.html\">argued<\/a>, recent reexpansion of the Fed&rsquo;s balance sheet has no direct &ndash; or, probably, indirect &ndash; impact on money stock measures.&nbsp;<\/p>\n<p>The fall in global real money momentum has further delayed the expected cross-over above weakening industrial output momentum, suggesting fading the Q1 equity market rally and favouring defensive sectors, quality and yield.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Partial information indicates that global (i.e. G7 plus E7) six-month real narrow money momentum fell for a third month in March, possibly breaching a low reached in June 2022. This increases confidence that a recent recovery in PMIs will reverse into H2.&nbsp; The June 2022 low in real narrow money momentum presaged a low in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-4656","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/4656","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4656"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/4656\/revisions"}],"predecessor-version":[{"id":6965,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/4656\/revisions\/6965"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4656"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4656"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4656"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}