The latest hard data on global trade continue to show a picture of global trade volumes returning to trend growth. We look at the CPB global trade monitor data and the RWI/ISL global shipping container throughput index. The latter series provides a slightly more timely view and the key data series from that is displayed below. It shows seasonally and working day adjusted global container throughput activity and you can see a clear dip down in 2015/16 a sort of mini-recession or near-miss global recession as I’ve explained it previously. In any event it’s a sign of health for the global cyclical outlook.
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The stronger global trade volume growth is consistent with rebounding industrial production growth and is also reflected in and reinforces the rebound in corporate earnings growth. The improvement in global trade growth is a positive dynamic for the global economy as it helps broaden growth and particularly boosts export-oriented economies. Overall it's another positive for the global growth and inflation outlook and adds weight to our thesis that the core trend in global monetary policy is for tightening/normalization and that growth assets are likely to outperform defensive/income assets in this regime.
The RWI/ISL Global Container Throughput Index shows a return to trend growth after going through a mini-recession. This is a positive dynamic for the global economic outlook.
Taking a look at the CPB data you can see a clear rebound in world import volume growth and world industrial production growth. While base-effects have no doubt boosted the growth rates, it's probably still in the right direction.
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Article by Callum Thomas, Top Down Charts
