Benjamin Jones, Invesco EMEA

Director of Macro Research, Invesco EMEA
Content for Professional Investors in Europe & the Middle East. Important information:

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

Professional Investors only: In January market pricing had the Fed cutting six times in 2024. Stronger growth and inflation data have caused nearly half of those cuts to be taken out. Stronger PCE this week could be the final nail in the coffin for rate cuts in H1.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

These issues are putting upward pressure on shipping costs. Chinese PPI has tended to follow shipping costs with a lag. Rising Chinese PPI could challenge the goldilocks disinflation narrative that supported risk assets in 2023. Something to watch closely.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

Professional Investors only: My three favourite, or rather most worrying charts on shipping troubles today. The first, and simplest shows, traffic through the Suez Canal continuing to decline as ships avoid the Red Sea and Suez Canal.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

In normal times taking a route east from Asia, through the Panama Canal, is an alternative. However, a drought in the region means water levels in the lakes feeding the Panama Canal lock system are low restricting the ability of ships to move through the Canal.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

Professional Investors only: Blowout payroll numbers mean the Fed is highly unlikely to cut rates in March. We dig further into the US labor market on an emergency episode of Time in the Market https://t.co/J9t6unzThk

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For Professional Investors only: UK road fuel sales are falling. Sales are only a little higher than at the same time in 2020 and 2022, and lower than in 2021. WFH practices are likely one explanation but perhaps too is that squeezed households are using their cars less.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For UK Professional Investors Only: Reading company transcripts of late it is clear companies are destocking, both in the US and Europe. For more discussion of 2Q earnings season please tune into Time in the Market. https://t.co/yzTlhPTGsI

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

That has big implications for rate markets. These two charts illustrate the inflation points in more detail.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For UK Pofessional Investors only: In today’s Ben^2 podcast we discuss rates and currency views. In the conversation we suggest the best of the US disinflation story might be behind us, and why UK inflation could start to fall very rapidly. https://t.co/eHK9OQc7g5

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For UK Professional Investors only: My latest chat with Ben Gutteridge has just dropped. This week we discuss a rather unusual H1, UK Inflation & Rates, and why we’re not expecting shock and awe from Chinese stimulus. https://t.co/TvnCZ9UaWj

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For Professional Investors only: It’s an asynchronous world. An unusually large divergence has appeared between US and European economic surprises. With divergence comes opportunity.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For UK Professional Investors only: Check out our new fortnightly podcast. Ben Gutteridge and I aim to cover the big market topics in around 10mins. This week we cover what happens now the debt ceiling has been lifted, US jobs, and oil.
https://t.co/zIDSPHmGXt

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For Professional Investors only: The t-bill market is feeling the pressure of debt ceiling talks going down to the wire. Yields on bills expiring on 1st June have soared above 7%, thus pricing a greater chance of default. The yield on a bond expiring a week earlier is below 4%.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For Professional Investors Only: The sense I get from Fed speakers is that ‘skip’ is replacing ‘pause’’. Rate expectations have shifted up but, for me, still only play out if we get a significant economic shock. Slower inflation is not enough to justify the rate cuts priced.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For Professional Investors only: Japan core CPI printed 4.1% for April, the highest inflation reading in more than 40 years. A further sign that Japanese companies have strong pricing power and could continue to deliver solid earnings growth.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For Professional Investors only: Don’t you hate it when your bank account drops below $100bn? The US Treasury Cash balance has dropped close to $85bn after a small tax take last week. Thus the X date of early June that Janet Yellen has been pointing to is looking more likely.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

Second companies are talking about job cuts more than labor shortages on earnings calls now. A big change from what has been observed over the last two years

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For Professional Investors only: Two charts I am watching closely showing that the US labor market is getting weaker. First fewer people are quitting jobs and that should mean lower wage growth.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For Professional Investors only: Debt ceiling movies have always ended the same. Without default. However, today the cost of insuring against a US default on its sovereign debt has soared above 2011 or 2013. Some are betting on a different end to the 2023 movie.

[Benjamin Jones, Invesco EMEA @MacroBenInvesco]

For Professional Investors Only: Wage growth should be slowing. Fewer workers are quitting jobs, a signal that workers are less confidence in the job market. But the Atlanta Fed Wage Growth Tracker ticked higher in March. A problem for those hoping for lower rates this year.