Our leading indicator for China has turned down further which adds to the impression of an overall weak turn in Chinese growth. We would still term the turning point as intact, but all components of our leading indicator recently came in with negative readings.

The aggregate real global policy rate is still firmly negative due to the commitment to low interest rates in the major G4 economies, but we are seeing notable divergence between economies. The UK remains a textbook example of stagflation while real rates also differ markedly between emerging economies.

The Japanese economy continues to weaken and a recession is now the main consensus. The country’s trade balance, which was long in surplus, is now moving deeper and deeper into deficit and the third quarter numbers almost certainly will show contraction, and these are more than likely to be followed by another set of negative readings for Q4

South Korea is still being touted as an emerging market, but this is increasingly becoming a misnomer. The country’s demographics are now increasingly negative and the South Korean society is in the throes of a long and painful economic and demographic transition towards an export dependent economy.