Inflation returns to the global economy?
Over recent weeks, many analysts around the world have become more optimistic over the outlook for world trade and this view has apparently been helped by some – although by no means all – of the most recent Asian trade data and by a partial rebound in PMI (Purchasing Managers’ Index) data in Europe and the USA. Admittedly, we are usually quite sceptical of the ‘information value’ of the PMIs (in the 1990s we did find them useful but over recent years they seem to have become ‘endogenous’ or reflexive with regard to equity markets) but we do nevertheless have some considerable sympathy with the hypothesis that global trade values may be increasing once again following what would appear to have been an 18-month long slump. However, we are also aware that the available data is not yet unambiguous on this topic.
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