9 Dec 2014
Time for Japan and the Euro area to rise – JPM
FXStreet (Barcelona) - The J.P.Morgan Team forecasts Euroarea and Japan to grow 1.5% and 4% respectively in this quarter, and expect US to maintain the solid underlying momentum.
Key Quotes
“As we move through significant regional and sectoral rotation, we expect the global economy to sustain growth close to last quarter’s 3% pace. The latest news is not decisively upbeat, and notably our all-industry PMI slipped again in November. However, a number of recent developments bolster our confidence in our view that the global economy is establishing a base for sustained above-trend growth.”
“Much attention has been paid to a narrowing EM/DM growth gap, but we think the more important regional shift now taking hold is within the DM. We believe that the US growth gap with other DM economies is narrowing—as the Euro area and Japan accelerate while the US maintains solid underlying momentum.”
“Japan’s 3Q MoF corporate survey came in stronger than expected, pointing to a significant upward revision to capital spending last quarter. We forecast that the second preliminary GDP report, due next week, will show a flat outcome. With current-quarter indicators pointing positive, we now expect Japanese growth to average 2% in 2H and sustain this pace through 2015.”
“The Euro area remains the main source of concern, and we continue to see risks skewed to the downside of our forecast for 1.5% GDP growth this quarter. But Friday’s strong gains in German October factory orders and sales reinforce our view that last quarter’s production drop will reverse into year-end. We expect a solid gain in German and Euro area October IP next week.”
Key Quotes
“As we move through significant regional and sectoral rotation, we expect the global economy to sustain growth close to last quarter’s 3% pace. The latest news is not decisively upbeat, and notably our all-industry PMI slipped again in November. However, a number of recent developments bolster our confidence in our view that the global economy is establishing a base for sustained above-trend growth.”
“Much attention has been paid to a narrowing EM/DM growth gap, but we think the more important regional shift now taking hold is within the DM. We believe that the US growth gap with other DM economies is narrowing—as the Euro area and Japan accelerate while the US maintains solid underlying momentum.”
“Japan’s 3Q MoF corporate survey came in stronger than expected, pointing to a significant upward revision to capital spending last quarter. We forecast that the second preliminary GDP report, due next week, will show a flat outcome. With current-quarter indicators pointing positive, we now expect Japanese growth to average 2% in 2H and sustain this pace through 2015.”
“The Euro area remains the main source of concern, and we continue to see risks skewed to the downside of our forecast for 1.5% GDP growth this quarter. But Friday’s strong gains in German October factory orders and sales reinforce our view that last quarter’s production drop will reverse into year-end. We expect a solid gain in German and Euro area October IP next week.”