The Global Macro Outlook:The long grinding cycle

Our long grinding cycle view has been refreshed and reiterated: two newheadwinds for EM economies, a drawn-out but manageable restructuring ofChinese corporate debt, and a slow and cautious Fed tightening cycle into early2019. The three reports are here:

8 April 2016 Macq-ro insights: What’s next for EM economies?

8 April 2016 China macro: Debt/equity swaps, lessons from the past

6 April 2016 FOMC – the hiking cycle and the neutral rateThe commodity complex provides a useful spyglass on global developments.

Colin Hamilton and the Macquarie commodities team are calling the end of thetwo-year negative momentum in global industrial production, which likely hitbottom in December at 0.4% YoY. Whilst no major trend reversal is forecast,the end of deterioration is expected to be positive for sentiment. We areforecasting 1.8% global industrial production growth in 2016, after 3.2% in 2014and 1.9% in 2015.