In this weekly update, Primary Vision Network speaks about the latest developments in the global economy. We need to closely observe Japan’s economic health, its share of imports, the gap between Yen and USD and finally the unwinding of its carry trade. All of these carry serious repercussions for the world at large! This update tries to answer why is this the case.
1. Monday Macro View: What did Udema (of BoJ) recently announced? – FREE
BoJ’s recent announcement is more significant than Powell’s Jackson Hole speech for a number of reasons that are deeply intertwined with the current global economic landscape, especially given the context of potential recessionary pressures. The last time the Bank of Japan increased its interest rate by a mere 0.25%, the global markets reacted with panic. This was not just a reaction to a minor rate hike; it was a recognition of the potential unwinding of the massive carry trade that has been built up over the last decade.
2. NOV’s Perspectives in Q2: Key Takeaways – PREMIUM
NOV estimates that the new international wells need corrosion-resistant flowlines, chokes, valves, and processing equipment. In the current environment, offshore E&P operators need to reactivate drilling rigs. The process can accelerate the corrosion, which needs to be retrofitted with drill pipe bits and drilling tools. NOV’s book-to-bill ratio was 1.29x in 1H 2024. Despite the headwinds in North America rising demand in offshore and international markets should keep the ratio above 1x in 2H 2024. Read the article by Avik Chowdhury to learn more about this!
3. Primary Vision Insights – ENTERPRISE
The crude markets have been struggling to break higher with brent moving back to the bottom of our range $77-$83. There is a growing concern about slowing demand, which has overwhelmed some of the bullish narratives that have hit the market. We’ve been adamant about the issues facing demand, but the market has been slow to accept a struggling global market. Some of the bullish setups that have yet to happen. Mark Rossano further adds: If the Fed cuts rates, it will have a very temporary effect as volume is the biggest issue as the Fed pushes the string on the yen carry trade. We are in for a bumpy ride! READ THIS INSIGHT to learn more!
4. A Hidden Recession? – FREE
The global economy stands on uncertain ground as we enter the second half of 2024 and approach 2025, with mixed signals and persistent challenges shaping the outlook. Despite widespread expectations of a recession, several factors have kept such a downturn at bay so far, however, the recent jobs report and stock market sell-off have elevated the fears of an upcoming recession anew. To find out, Osama Rizvi, interviewed a few people in Pakistan and following are some of their insights – that may speak to the theme of recession better than many financial papers out there.
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