G7 Inflation Average Current projections and trends suggest a return to 5% inflation is unlikely in the near term, but long-term structural changes and unforeseen shocks could alter this outlook. Image: BofA Global Investment Strategy
Returns – G7 + China Free Liquidity and MSCI ACWI (Leading Indicator) Global free liquidity continues to rise. When global free liquidity is above 10%, equity markets tend to perform well: the average next 12-month return is 23.4% with a hit ratio of 100% since 2009. Image: BofA Global Research
U.S. Dollar Smile (U.S. Growth vs the Rest of G7) and U.S. Double Deficit Global growth rebound and widening U.S. double deficit suggest a further depreciation of the U.S. dollar. Image: Nomura
Largest Bailouts in History in 2020 USD vs. G7 Debt to GDP This chart shows the largest global bailout in history, as a response to the coronavirus crisis. Image: Deutsche Bank
G7 OECD Composite Lead Indicator and Global Manufacturing PMI This chart also suggests a pick-up in the global manufacturing PMI, after having been in contraction territory. Image: BofA Global Research
U.S. Dollar – Real Effective Exchange Rates Based on Unit Labor Costs Chart suggesting that the U.S. dollar is overvalued relative to its G7 peers. Image: Gavekal, Macrobond
Second-half Recovery in Growth? Better economic data could extend the business cycle. Currently, G7 & BRIC leading indicators remain encouraging and suggest no imminent recession. Image: Richardson Wealth