Fathom weekly chartbook

Key charts from the past week - 9 Dec 09

After a much stronger than expected payrolls on Friday, it would be expected that equity markets would be making new gains. However, the tide of weak news has served to over-run this positive datapoint and leave most indices lower over the past week. There was a large downward revision to Japanese GDP, a downgrade of Greek sovereign debt and warnings over the UK and US debt positions. All of these come on the back of the Dubai debt issues and have further undermined confidence in the sustainability of the rally. German IP also reversed dramatically in October according to data this week, just after the car-buying scheme ended, underlining how important government stimulus schemes have been to boosting growth. Today's Pre-Budget Report in the UK and rather public debate on other countries budget deficits, such as Greece's, serve to remind of the fine balance required in supporting economic growth and maintaining fiscal credibility in the markets.

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Key charts from the past week - 3 Dec 09

The past week has seen markets shrug off worries over Dubai and continue the move back towards risk seeking. However, Dubai serves as an important reminder that the problems resulting from the crisis are yet to be worked off. Below we look at data which show how market expectations have now caught up with the last five months of macro surprises; expectations may now be at an inflection point. Other data this week, such as the PMI surveys, remain broadly positive, and although the headline numbers hide the inconsistencies in Europe's rebound, China's data suggests rapid domestic growth is still in the pipeline. Finally we touch on the UK's M4 lending details, which suggest that QE has not had the hoped for impact on this key measure.

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Key charts from the past week - 18 Nov 09

The news that the MPC split three ways at its November meeting has on balance increased the likelihood that the program will end by February next year, with only one member voting for an expansion of the programme in excess of the £25bn agreed. Nonetheless, the minutes were far from hawkish -  inflation is more likely to undershoot target over the forecast period, and some members of the MPC felt the downside risks remain larger than expressed in the Inflation Report. It would seem to us that as far as the clear majority of the committee is concerned, the risks of doing too little are far greater than the risks of doing too much. And should the recovery peter out, as we fear it will, then they would not be adverse to further increasing the scale and perhaps one day, the scope of QE. Ultimately the big decisions on QE may not be taken until after the general election when there will be more certainty over the fiscal landscape for the coming years.

In this week's charts, we consider inflation in the UK which looks to be closely tied to sterling's movements, Japan's GDP deflator which has been briefly pulled  into positive territory, but this only masks the underlying weakness in domestic demand. The weak home building data from the US today, also confirms some of the weakness seen in the components of the manufacturing data this week, as furniture and construction supplies continue to decline as the home-buyer subsidy is withdrawn at the end of this month. 

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