For our final chart pack of 2022, we look back at the year’s greatest hits with Macrobond customers. These visualisations had the most clicks through to the Macrobond application – enabling both deeper examination and potential customisation of the chart in question. Our first eight charts show how Macrobond users were focused on the related crises of surging inflation and Russia’s invasion of Ukraine. Oil prices soared in early March, and knock-on effects continued in the gas and electricity markets. As inflation stayed hot, central banks turned hawkish. We have updated the charts to show how trends evolved, but all of these issues are still pertinent as we approach 2023. Look out for more popular 2022 charts when we release Part II in January.
<h2 class="blog-h2 blog-h2-styles first-item" id="Comparing-oil-shocks-in-the-wake-of-the-Russian-invasion-of-Ukraine">Comparing oil shocks in the wake of the Russian invasion of Ukraine</h2>
Featured in Charts of the Week on March 11
We published this chart as markets reacted to Russia’s invasion of Ukraine. As crude prices increased sharply, we drew parallels with famous oil shocks (and recessions) dating back to the famous OPEC embargo crisis of 1973.
Since March, oil prices have fallen back below their long-term trend, but all eyes are on prospects for a recession in 2023.
<p class="blog-chart-link">Macrobond users, access the chart here</p>
<h2 class="blog-h2 blog-h2-styles" id="The-credit-impulse-wanes-from-US-to-China">The credit impulse wanes from US to China</h2>
Featured in Charts of the Week on March 25
The ‘credit impulse’ represents the flow of new credit from the private sector as a percentage of gross domestic product. In March, we created a credit impulse measure for the US, China, and Eurozone (G3). We found a correlation that suggested a measure of global sentiment was set to decline.
Thanks to feedback from our community of users, several adjustments have been made to this chart since it was first published. Credit impulse is now measured more accurately and has rebounded since March.
This indicator is positively correlated to the US ISM Manufacturing Purchasing Managers Index (0.67, with 14 months of lag). This correlation implies US PMI should rebound above 50, indicating the manufacturing economy is generally expanding.
<p class="blog-chart-link">Macrobond users, access the chart here</p>
<h2 class="blog-h2 blog-h2-styles" id="Comparing-Fed-tightening-cycles">Comparing Fed tightening cycles</h2>
Featured in Charts of the Week on May 27
By May, Chairman Jay Powell was determined to tame inflation, but markets were not fully anticipating the severity of the tightening cycle that followed.
The version of the chart below published in May anticipated that the Federal Reserve’s key interest rate would peak at 3 percent, as predicted by Fed funds futures. As we can see, the market now anticipates a terminal rate of about 5 percent in a few months’ time.
The predicted pace and length of the cycle has not changed that much from perceptions in May, however: both show a peak reached 18 months after the start of the cycle.
<p class="blog-chart-link">Macrobond users, access the chart here</p>
<h2 class="blog-h2 blog-h2-styles" id="Natural-gas-inventory-worries-in-Europe">Natural gas inventory worries in Europe</h2>
Featured in Charts of the Week on July 29
Natural gas inventories were in the headlines all summer amid grave warnings that Europe might face a winter shortage. In July, only four EU countries exceeded the bloc’s storage targets.
European countries subsequently rushed to buy gas on the market and found alternatives to Russian shipments. This led to record prices (especially for the benchmark Dutch TTF gas futures). Today, almost all EU countries are above the 80 percent capacity threshold set by the European Commission in the summer, as the chart now shows.
<p class="blog-chart-link">Macrobond users, access the chart here</p>
<h2 class="blog-h2 blog-h2-styles" id="Inflation-matched-the-worst-case-scenario">Inflation matched the worst case scenario</h2>
Featured in Charts of the Week on August 19
In 2022, were you on “team transitory” or were you concerned inflation would persist?
When we first published this chart, our idea was to display several scenarios for the year. We showed that even assuming consecutive growth rates of zero month-over-month, US inflation would still be above 5 percent on an annualised basis at the end of the year.
It turns out that reality was roughly in line with our more pessimistic August scenarios: the latest inflation print was above 7 percent.
Updating our chart to peer into 2023, only a scenario of consecutive month-on-month decreases of 0.3 percent or more could bring inflation back to the Fed’s 2 percent target within the next six months.
Tip: this chart allows for the change region function.
<p class="blog-chart-link">Macrobond users, access the chart here</p>
<h2 class="blog-h2 blog-h2-styles" id="US-inflation-hotspots-and-correctly-anticipating-a-cooling-trend">US inflation hotspots and correctly anticipating a cooling trend</h2>
Featured in Charts of the Week on August 26
When we first published this heat map, we had no way of knowing that inflation had reached its peak (at least temporarily). But there was a patch of cool blue indicating a broad-based decline in commodity prices was underway.
The updated heat map clearly indicates how this trend has spread: all of its indicators have slowed over the past four months.
<p class="blog-chart-link">Macrobond users, access the chart here</p>
<h2 class="blog-h2 blog-h2-styles" id="European-electricity-market-settles-down-after-summer-panic">European electricity market settles down after summer panic</h2>
Featured in Charts of the Week on September 2
Luckily for Europeans, electricity prices didn’t follow the futures curve we drew back in September. Prices dropped in October amid balmy temperatures and are returning to levels roughly in line with winter 2021.
That’s still historically high, but it seems that the worst is behind us.
<p class="blog-chart-link">Macrobond users, access the chart here</p>
<h2 class="blog-h2 blog-h2-styles" id="There-are-still-very-few-doves-on-our-central-bank-tracker">There are still very few doves on our central bank tracker</h2>
Featured in Charts of the Week on September 9
There has been no paradigm shift since we first published this chart three months ago. Countries that were tightening kept on hiking rates.
However, it is worth noting that among the four exceptions to the trend (China, Japan, Russia and Turkey all decided to cut rates in 2022), there has been only one nation that has loosened policy very recently. Turkey cut its key rate in November, while the other three economies kept their key rate unchanged.
<p class="blog-chart-link">Macrobond users, access the chart here</p>
All written and electronic communication from Macrobond Financial AB is for information or marketing purposes and does not qualify as substantive research.