German manufacturing orders posted a big 12-month decline, but that's partly due to overhang effects. What's more worrying is that the tentative rebound in late 2018 has come apart again, with orders resuming their decline in December. Maybe it wasn't just about emission rules?

So now we know why the Fed turned dovish and it begs the question: are they dovish enough? SLOOS survey (which they had at the meeting) revealed sharp and sudden reversal of lending conditions in past 3m, enough to suggest they should consider cutting rates instead of hiking them

Last week’s flash PMIs were seriously bad: with three out of the big four economies now below 50, the world PMI is also likely to break that symbolic level. However, from a tactical perspective, production is falling faster than demand, setting up at least a a near-term trough

World manufacturing PMI is set to fall below 50 in February, but in the near-term, this is likely to lead to lower inventories and a possible stabilization of growth expectations at a low level in ther spring. Dr Copper seems to agree with this diagnosis.

Ahead of Euro Zone GDP data: sentiment suggests the trend is still down for growth. No relief for the ECB, you have to wonder why the decided to hold off for another two months before they correct the policy error.

Fed likely to cut 25bp, but wait with guidance on next steps until new economic forecast in September. One-and-done would take FF rate from just above to just below neutral level of 2.25% implied by the Fed’s r* estimate of 0.65% and current core PCE at 1.6%. That's OK for now.

just when you thought it was safe... July's PMI was promising: decline levelled off; rising new orders and falling inventories pointed to momentum increase and stabilization of earnings exps. But now, just like in Q2, a trade war escalation raises the risk of another leg lower

With the trade war escalating, a 'neutral' Fed isn't enough - more cuts are needed to compensate. But how far can the Fed go? Today's NFP suggests there is no room for agressive easing with wages rising 3%+ and EMPPOP close to past cycle peaks. That's a policy dilemma right there

Falling risk appetite ushed the VIX briefly above 24 while the S&P 500 declined by around 6%. This is close to a normal initial reaction to sentiment shock: a VIX increase of 50-100% accompanied by an S&P 500 decline of 5-10%, followed by choppy bottoming over the next few weeks.

Once the psychologicalshock is digested, focus will turn to fundamental impact. Fed reaction is key to how bad it will be, and markets expect a strong reaction. But can the Fed cut 100bp+ with wage inflation above 3%? This policy dilemma dilemma will be in focus in coming months

So it's just two hours to go before we hear from Fed chair Powell, and the conventional policy analysis suggests he shouldn't accommodate rate cut hopes. However, if you hit below target 90% of the time, perhaps you should adjust your aim. That's the opening for a dovish signal.

A ray of light? After 15 months of uninterrupted decline, the world manufacturing PMI posted a small gain in August. It had been underway for some time, but the trade war always seemed to get in the way. Stronger growth and dovish Fed: time for equities to break higher?

Tactical breakout: equities and bond yields break higher as better macro data, dovish CBs and easing trade war fears lift risk appetite. We expect more near-term upside, but also note that central banks using all their ammo to delay a recession will add risk when it finally comes

Tactical upswing? World manufacturing PMI posts first back-to-back increases since 2017, macro surprises turn neutral as policy turns supportive. Looks more like Q1 2016 than Q4 2018... if you disregard the political uncertainty, that is.

And about that ISM/PMI divergence in the US - hard data seem to be on the side on the Markit PMI. Durable orders-inventories balance turned higher 4-5 months ago, and this was also a warning of an ISM trough in 2016

German orders weren't as bad as they looked. The 12m decline was big, but most of it happened more than 6 months ago. Monthly change slightly below consensus, but prior month revised higher by twice as much. A bit like the 2012 trough? Provided trade war doesn't come to Europe

I was proud to get to present our sustainable finance 2.0 story to European bank regulators and supervisors today at the ESE seminar at Bundesbank in München today!

First set of October data from US manufacturers still doesn't corroborate the ISM scare story from last month. Not an all clear, but an indication that the economy has not fallen over a cliff. If political risks ease, markets are likely calm down about growth too.

Last week European stock indices broke the ceiling after three unsuccessful attempts in 2019, supported by easing political risks, improving macro momentum and accelerating policy support. Now we just need S&P 500 to follow suit - big week coming up with FOMC, PMIs, ISM, NFP...

Ahead of next week's key ISM release, we took some encouragement from the Markit flash PMI and regional surveys. September's weak ISM still looks like an outlier, and the bigger picture looks more like the tactical reversals in 2012 and 2016 when the Fed delayed recessions.