We’ve been talking for a while about a growing divergence between impressive “soft” economic data (surveys estimating sentiment) and more sluggish “hard” releases quantifying activity, particularly in the US. As examples, NIFB small business sentiment sits near 43-year highs and last week US consumer confidence hit a 17-year peak. However, US economic growth for Q1 is on course to register no more than a 1.5% annualised expansion. This week the dynamic gained broader attention as a report from Morgan Stanley suggested the performance gap has never been so wide.
Nonetheless, the balance proved “just right” for markets – sentiment supporting equities and more muted real data keeping interest rates in check. On low volumes, bonds, equities and commodities all moved higher. This included oil posting its best week of the year as Kuwait’s oil minister gave his support to a time extension for OPEC supply restrictions.DOWNLOAD THE FULL ARTICLE View All Global Market Updates
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