IMF boosts 2021 global growth estimate to 6.0% from 5.5% in January

IMF more upbeat on global growth

IMF more upbeat on global growth
  • 2021 would be strongest year since 1976
  • Advanced economies +5.1% vs +4.3% in Jan
  • Emerging markets 6.7% vs 6.3% in January
  • The IMF sees 4.4% growth in 2022
  • Says global economy contracted 3.3% in 2020 vs 3.5% prior estimate
  • US GDP seen at 6.4% from 5.1% in Jan estimate on stronger stimulus
  • Says that growth depends on vaccine rollout
  • Sees multi-speed recovery reflecting vaccine rollout differences, extent of fiscal support and structural factors
Country numbers compared to January estimates:
  • US 6.4% vs 5.1%
  • Germany 3.6% vs 3.5%
  • France 5.8% vs 5.5%
  • Japan 3.3% vs 3.1%
  • UK 5.3% vs 4.5%
  • Canada 5.0% vs 3.6%
  • China 8.4% vs 8.1%
  • India 12.5% vs 11.5%
The biggest delta in all of those is Canada, which helps to explain why CAD has been the best-performing G10 currency so far this year.

US initial jobless claims 719K vs 675K estimate

US initial jobless claims and continuing claims for the current week

US initial jobless claims and continuing claims for the current week
  • Prior week. Revised lower to 658K
  • Initial jobless claims 719K versus 675K estimate
  • Initial jobless claims 4 week average 719 versus 729.5 last week.  This it is the lowest level since March 14, 2020
  • Continuing claims 3794K vs 3750K estimate.  Prior week revised to 3840K vs 3870K initial reported
  • Continuing claims 4 week average 3978.5K vs 4125.75K last week.
  • During the week ending March 13, 50 states reported 7,349,663 continued weekly claims for Pandemic Unemployment Assistance benefits (vs 7,735,491 last week), and 51 states reported 5,515,355 continued claims for Pandemic Emergency Unemployment Compensation benefits (vs 5,551,215 last week).
  • The largest increases in initial claims for the week ending March 20 were in Massachusetts (+11,386), Texas (+7,599), Connecticut (+4,170), Maryland (+2,605), and Virginia (+2,035),
  • The largest decreases were in Illinois (-55,580), Ohio (-45,808), California (-13,331), New York (-4,251), and Florida (-2,991).
The claims move back above 700K but the four week averages are still trending to the downside.  The policymakers at the Fed are likely still concerned about the high levels for the initial claims.  The pre-pandemic levels were around 250 – 280K.

UK Q4 final GDP +1.3% vs +1.0% q/q prelim

Latest data released by ONS – 31 March 2021

  • GDP -7.3% vs -7.8% y/y prelim
  • Private consumption -1.7% vs -0.2% q/q prelim
  • Government spending +6.7% vs +6.4% q/q prelim
  • Exports +6.1% vs +0.1% q/q prelim
  • Imports +11.0% vs +8.9% q/q prelim
  • Total business investment +5.9% vs +1.3% q/q prelim
Slight delay in the release by the source. The preliminary report can be found here.
There are quite a number of notable revisions to the report, with consumption seen much weaker than initially estimated while business investment has been revised to being much higher than seen in the preliminary data.
In any case, the slight bump higher reaffirms the resilience in the UK economy despite the November lockdown at the time. Q1 economic conditions are likely to take a hit amid tighter restrictions but the outlook for 2H 2021 looks bright amid the quick vaccine rollout.

China March PMIs: Manufacturing 51.9 (expected 51.2) & Services 56.3 (expected 52.0)

China official PMIs for March show improvement

Manufacturing 51.9

  • expected 51.2, prior 50.6

Non-manufacturing 56.3

  • expected 52.0, prior 51.4

Composite 55.3

  • prior 51.6

Bank of Japan Governor Kuroda talking again – global, Japan, economies showing signs of bottoming out

Kuroda speech, sticking to his script and not adding anything new or surprising.


  • global economy showing signs of hitting bottom, Japan’s economy showing similar signs
  • impact of covid-19 on Japan’s economy to persist for prolonged period
  • Japan’s economy to experience clear, positive growth in fiscal 2021
  • risks to Japan’s economy, prices skew to downside
  • BOJ will take additional easing steps without hesitation if needed
  • says YCC exerting intended effect on economy
  • BOJ must stem any sharp rise in interest rates, have made tools available to do so in March review
  • BOJ must keep entire yield curve stably low while impact of pandemic continues


  • says steps taken at March review allow boj to promote powerful monetary easing even further
  • while it is taking time, it’s possible to achieve BOJ’s 2% inflation target by maintaining easy policy



This one ….

 it’s possible to achieve BOJ’s 2% inflation target 
It is also possible I will have a dinner date with Gigi Hadid, and it may take time. But don’t go basing any trades on that, K?

Chinese data released over the weekend, Jan- Feb industrial profits up 179% y/y

Profits in the first two months of 2021 were up 179% from the same period last year

  • At the time last year (January-February) China was entering and then in strict COVID-19 lockdown ahead of the rest of the globe
It may be more instructive to compare with Jan-Feb of 2019
  • profits were up 72.1% from the 2019 levels
ps China Stats have combined data for January and February to exclude distortions caused by the week-long Lunar New Year, which fell in February in 2021

UK March preliminary services PMI 56.8 vs 51.0 expected

Latest data released by Markit/CIPS – 24 march 2021

  • Prior 49.5
  • Manufacturing PMI 57.9 vs 55.0 expected
  • Prior 55.1
  • Composite PMI 56.6 vs 51.4 expected
  • Prior 49.6
That is a solid beat and adds to the optimism surrounding the rebound in the UK economy once restrictions are eased later on in the year.

Business activity in the UK returned to expansion and improved at its quickest pace in seven months, with the services reading also coming in at the highest since August last year. Meanwhile, the manufacturing reading is the highest in 40 months.

Service providers noted forward bookings from domestic consumers as the higher level of activity is linked to the prospect of looser restrictions later in the year.
Manufacturers also noted advanced orders helping to boost demand conditions as export sales remain relatively subdued. Markit notes that:

“The UK economy rebounded from two months of decline in March, with business activity growing at its fastest rate since last August as children returned to schools, businesses prepared for the reopening of the economy and the vaccine roll-out boosted confidence. Companies reported an influx of new orders on a scale exceeded only once in almost four years, and business expectations for growth in the year ahead surged to the highest since comparable data were first available in 2012. Employment consequently rose for the first time since the pandemic struck as firms expanded capacity in response to the new inflows of work and brighter outlook.

The surge in business activity is far stronger than any economists expected, according to Reuters polls, and hints at only a modest contraction of GDP during the first quarter, adding to evidence that the economy has shown far greater resilience in the third lockdown compared to the first. The encouraging readings on future expectations, job creation and new order inflows meanwhile all point to robust economic growth in the second quarter, especially if virus restrictions are lifted further.

“Worries persist though, especially in relation to near-record supply chain delays, a continued fall in exports and sharply rising prices, all of which are making life difficult for many companies. Many consumer facing companies meanwhile remain constrained by COVID-19 restrictions, which are likely to curb the overall pace of economic growth for some time to come, especially if we see a third wave of infections.”