• Leading indicators continue to look strong globally and PMI new orders have especially surprised on the upside. However, some indicators give an early warning of a growth peak in Q1 10, albeit from a fairly high level.
    • Global PMI rose significantly in January to 57.6 from 55.7 in December. Hence showing the largest reading since December 1999. New orders rose to 58.5, which is the highest level since April 2004. This led to another increase in global new orders – inventories balance, which points to continued strong growth in the short term.
    • OECD’s leading indicators continue to point to strong growth but monthly changes have declined somewhat further, pointing to a peak in global growth in Q1. Momentum in commodity prices is still high but also coming down from the peak levels of a couple of months ago.
    • In the US, with a reading of 58.5, the ISM rose more than expected and the details looked strong with new orders reaching a new six-year high. Our own inventory-demand ratio continues to be at a very high level. Going forward we expect the ISM to peak at about 60 during the next three months.
    • In Euroland the German Ifo expectations index rose above 100, whereas the Euroland PMI indices were a mixed bag. OECD’s leading indicator continues to signal strong growth in Germany. Scandi leading indicators in all countries continue to point to stronger growth in the manufacturing sector in the coming quarters.
    • In Asia leading indicators still point to strong growth, albeit some slowing is visible in several indicators. However, they still signal strong growth going forward. CEE PMI were almost unchanged, the production indices are moving toward positive (annual) growth rates again.
    • Outlook: We still expect Global PMIs to rise further in coming months, but the pace of increase will likely slow and become more uneven. We expect that momentum in OECD’s leading indicators will moderate further. This would be in line with our expectation that global growth will peak in Q1 and moderate during the rest of 2010 as the initial fuel to the recovery starts to empty. However, we expect global growth to stay slightly above trend, as employment picks up and supports demand.