Global Macro/Markets Notes: Week #29 (Jul 17-23, 2022)

Updated: 5 hours ago


Insights, Perspectives & Trends


Macro/Markets Overview

Weekly Highlights

Inflation, Inflation, Inflation

Welcome to another edition of our “Global Macro/Markets Notes”. As we look across currencies, bonds, equities, and commodities, we see that all four of these markets have already been smelling slower economic growth ahead.

Inflation and interest rates were front and center last week, but financial markets typically look past the obvious and towards the next thing. So, it is our job to tune out the noise and focus on the important information to understand how events are unfolding and the impact on our investment strategies.

While the probability of a recession has been rising, in our view, we don't yet see the scope for a deep or prolonged downturn. Said that, we believe financial markets started to price in an economic slowdown, as they go through the typical bottoming process.

Google trend search for topic "inflation"
Figure 1: Google searches for topic "INFLATION"

On google trends, the topic of inflation has been hitting recent highs worldwide (figure 1). Yes, the one-year US consumer price index increased more than expected to 9.1% in June (figure 2), but that is not the most relevant piece of information…

Line graph for US CPI Index year on year
Figure 2: US CPI Index YoY

Keep reading our notes to find out what are we thinking about all of this. I hope you enjoy this report and please let us know if you have any questions, concerns or comments that will help in the future versions of our publications.

Warm regards, LeoC.


Insights, Perspectives & Trends

While most equity markets finished the week lower (see details on next section), on the surface it seems the US market is maybe starting to look “pass the past”.