2 May 2023 – Positive market data to start May 2023. The markets on both sides of the Atlantic – the United States and Europe – have performed more positively than many analysts expected. The great recession in the Eurozone has failed to materialise and GDP in France is growing despite weeks of strikes and protests. And already the first short sellers and financial institutions are trying to make a stink elsewhere. Is that necessary?
US Purchasing Managers Index better than expected
The Institute for Supply Management (ISM) reports a rising value of 47.1 for the US Purchasing Managers Index in April 2023 compared to a forecast of 46.8 and still an ISM index of 46.3% in March 2023.
Eurozone avoids winter recession
Eurozone gross domestic product (GDP) is estimated to have risen by 0.1 per cent quarter-on-quarter in the first quarter. The “winter recession” feared in autumn is thus likely to have failed to materialise. France’s GDP even grew by 0.2 per cent, despite weeks of strikes and protests.
German inflation continues to fall
For the markets, the inflation data for Germany were of greater importance at the end of the week. According to the first estimate, inflation in Germany weakened further in April.
Commodity forecasts with significant deviations
Once again it becomes clear that price forecasts that span several years, if not decades, such as the World Bank‘s “Commodity Markets Outlook”, which is published regularly in April and October, should be treated with great caution.
Nickel and aluminium deviate strongly from the forecasts
Just look at the deviations in the forecasts for nickel price development for 2022, which in 2021 were still at a World Bank forecast of just $15.647 per tonne and then in April 2022 were an incredible 65% higher. The same can be said for aluminium, for example, where the price development deviates upwards by up to 35% compared to the forecast.
Whether the World Bank’s statistical models can still reflect reality despite possible adjustments to volatile methods and uncertainties remains to be seen. In any case, it is rather utopian to try to predict price developments until 2035.
Big banks with their own motives
The World Bank’s forecasts contain a lot of data that come from financial service providers and big banks or were borrowed from them. These in particular always have their own motives, which must be viewed with caution. Also and especially when it is once again claimed that GDP could decline somewhere, while the Eurozone, contrary to all bank and financial advisors who had predicted a recession there, is developing much better than “assumed”. Or in the case of JP Morgan Chase, which had sounded the same horn, participated extensively in bets on falling nickel prices and was one of the main financiers of the failed Tsingshan nickel short sell in 2022. This begs the legitimate question: Is this necessary?
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