The Weekly Brief (16 November 2015)Contributor Global Markets Insights Strategy Team
Eurozone economic data is surprising positively relative to expectations but US data, having been worse than expected all year, is no longer disappointing.
Even Chinese data, which has been consistently missing the mark since April and has been a major cause of the weakness in stock markets since then, are now closer to forecasts. This is a familiar pattern: after a period of disappointment, economic data often surprise on the upside because expectations are lower. Periods when surprise indices rise together are often good for equities. If US economic releases follow the positive trend in the Eurozone it may only require Chinese data to be less negative for stocks to continue rallying. This shouldn’t be hard given how gloomy everyone is about China and the stimuli that are now supporting the economy.
Economic surprise indicators improving
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