U.S. GAS PRICES have fallen less than $2.60 per million British thermal units from more than $9 six months ago. In real terms, prices have fallen to just the 3rd percentile for all months since 1990 down from the 86th percentile in August 2022:
U.S. CENTRAL BANK is expected to raise short-term interest rates to 3.50-3.75% by February 2023 up from 1.50-1.75% at present to curb inflation. From the second quarter of 2023, however, policymakers are expected to start reducing interest rates as the economy slows and inflation decelerates:
U.S INTEREST RATE traders anticipate a recession has become virtually certain following the continued acceleration of inflation. The yield curve spread between 2-year and 10-year maturities is now in the 98th percentile for all months since 1990:
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BRENT’s calendar spread from December 2022 to December 2023 has softened to a backwardation of $8 per barrel from $16 in early June as traders anticipate a cyclical economic slowdown will relieve some of the shortage in oil supply next year:
TEXAS electricity consumption increased at a compound annual rate of +1.5% over the last 20 years, reaching 427 billion kWh in 2021, up from 318 billion kWh in 2001:
U.K. REAL GDP rose by +0.51% in May from April, the fastest increase for four months, with particularly large increases in manufacturing (+0.87%) and construction (+1.54%):
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U.S. REAL FINAL SALES to private domestic purchasers (FSPDP) increased at an annualised rate of 3.7% in the first quarter, accelerating from 2.6% in the fourth quarter, according to advance estimates published on April 28.
Real FSPDP excludes the effect of foreign trade as well as the temporary impact of changes in government spending and inventory accumulation and depletion, so is the most useful measure of underlying spending by households and businesses. The economy exhibited strong momentum in the first three months of the year.
But headline real gross domestic product shrank at an annualised rate of 1.4% in the first quarter as a result of negative effects from foreign trade (-3.2 percentage points), inventory accumulation (-0.8 percentage points) and slower government spending (-0.5 percentage points):
U.S. S&P 500 equity index has risen just 2.5% over the last twelve months; the slow increase is consistent with an end-of-cycle recession or mid-cycle slowdown:
U.S. CONSUMERS were the most negative about the government’s economic policy in March for seven years – with levels of disapproval consistent with recessions and mid-cycle slowdowns in the past:
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EUROPEAN gas oil and Brent twelve-month calendar spreads are both trading in the 99.9th percentile for all trading days since 2000 as traders anticipate possible severe shortages of both crude and products stemming from Russia’s invasion of Ukraine and U.S./EU sanctions imposed in response:
EUROZONE manufacturers reported a less widespread expansion this month as war in Ukraine and inflation pushes the region’s economy towards a cyclical slowdown. Preliminary readings put the purchasing managers’ index at 57.0, down from 58.2 in February, and the lowest since January 2021, when economy was still gripped by pandemic:
GERMANY’s IFO business expectations index fell to 85.1 in March from 98.4 in February, a level only normally seen during a recession, as employers prepare for the impact of the war and sanctions to be felt on the domestic economy:
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