Today, we are pleased to present a guest contribution written by Filippo Natoli and Fabrizio Venditti of the Directorate General for Economics, Statistics and Research of the Bank of Italy. The views presented in this note represent those of the author and not necessarily reflect those of the Bank of Italy.
Big daily movement in 10yr, 5yr yields:
UNCTAD’s World Investment Report 2022 came out recently. Figure 1 depicts the recovery of FDI inflows.
With July in, it’s interesting to note that elevated probabilities of recession in 12 months come not from spreads, nor financial conditions, but oil prices.
If one took GDP as the determinant of NBER determined business cycles, this is what the picture would look like (normalizing on mid-Q4):
From Atlanta Fed and IHS Markit:
Is at record highs (at least back to 1947, using latest available data).
From the Philadelpha Fed, coincident index 3 month growth rates, through June 2022:
The quarter-on-quarter growth rate for Q2 at 0.9% was below consensus by 1.3 ppts (SAAR), but above GDPNow and IHS-Markit (0.4 ppts, 0.5 ppts respectively). While the mean revision for advance to third release is essentially zero over the 1996-2020 period (see BEA), over the last 5 quarters (2021Q1-22Q1), they have been 1.9 ppts (MAR 12.9 ppts, RMSR 6.8 ppts). That is, the characteristics of revisions from advance to 3rd seem to have changed (although I’ve not done a test for statistical significance), with the advance being revised upward over releases.
Here are some some observations to complement Jim’s post on the GDP release .