Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
You can access both of our platforms from a single Saxo account.
Chart of the Week : Hong Kong Air Freight Volume
Christopher Dembik
Head of Macroeconomic Research
Summary: Our 'Macro Chartmania' series collects Macrobond data and focuses on a single chart chosen for its relevance. It is published on a weekly basis. Today, we are looking at Hong Kong air volume freight as a proxy of the whole Chinese economy. The latest data was released less than two weeks ago, on 11 November.
Click to download this week's full edition of Macro Chartmania.
Today’s edition is about global air freight. We monitor air cargo growth statistics from major hubs in Asia and in Europe as they usually are sensitive to changes in the business cycle, especially in the manufacturing sector. This gives us interesting insights on the real state of the economy. On 11 November, the latest data was published for Hong Kong International Airport. This is the busiest air cargo hub in the world. Let’s put it that way, this does not draw a positive picture of the Chinese economy. The strict zero Covid policy continues to have a negative impact. After a strong rebound in 2021, freight volumes have been in contraction since February onwards. There is no hope for improvement anytime soon. The latest print for October shows a drop of 23.8 % year-over-year. This is close to the lowest historical point ever reached in January 2009 at minus 28.9 %. This is worse than during the first global lockdown of Spring 2020 (minus 13.1 %). The 3-month moving average, which smooths out the effects of month-to-month changes, was out at minus 23,2 % year-over-year in October. This is another confirmation that the zero Covid policy is a serious drag for the Chinese economy. But we doubt the country can exit from it anytime soon (even an easing of Covid-19 control measures seems a bit far away now that new cases are surging in several major cities). If we extrapolate figures from Taiwan (which is the latest example to exit zero Covid policy), China could expect 700 000 Chinese to die in five months. Of course, this is only a rough estimate. But it shows that exiting the zero Covid policy is not possible, for now. All of this also has global implications. While China contributed to about 30 % of global growth impulse before the pandemic (more than the combined contribution of the United States and the eurozone), it is now down at roughly 10 %. China is not anymore the global growth engine it used to be along with the United States.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...