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The Mixed Signals on Global Trade


(Dion Rabouin – Axios)

As the world economy has slowed, economists are beginning to look for signs of whether it’s headed toward recovery or recession.

The big picture: One of the most popular metrics is global trade, which unfortunately is flashing divergent signals.

On one hand: Torsten Slok, chief international economist at Deutsche Bank, argues that global trade is rebounding. The Harpex and Dry Baltic shipping indexes, which track global container and raw materials shipping, both suggest global trade bottomed toward the beginning of the year and started improving.

“A pre-condition for being bullish U.S., European, and Asian growth later in 2019 is that we need to see a stabilization in world trade volumes,” Slok wrote in a note to clients.

“So the question is to what degree the observed move higher in prices is enough to signal a coming stabilization in volumes.”

On the other hand: The shipping numbers are contradicted by the worsening picture in manufacturing around the world. As we detailed Friday, Germany’s manufacturing numbers have been ugly and the same is true for much of the euro zone. Click here to read more.

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