EcoWeek

Uncertainty: at a peak ?

4
Ecoweek 19-38 // 18 October 2019  
economic-research.bnpparibas.com  
Pulse  
Uncertainty: at a peak?  
We monitor uncertainty by means of different metrics. Starting top left and moving clockwise, the economic policy uncertainty index, which is based on  
media coverage, is at a historical high, on the back of US-China trade tensions and fears about a disorderly Brexit. The recent trade deal between the  
US and China, although of a very limited scope, and the agreement between the UK government and the European Union on Brexit, have fuelled hope  
that uncertainty will abate in the near term. This obviously remains to be seen. Uncertainty of companies in Germany is still increasing whereas it has  
eased a bit in the US. The geopolitical risk index, again based on media coverage, is on a rising longer-term trend. Moreover, it has rebounded as of late.  
Uncertainty based on individual share price performance remains low although in the US the trend is up. This could reflect growing unease about the  
outlook despite an accommodative monetary environment.  
Germany: IFO Dispersion  
US: Business Uncertainty Index [RHS]  
Economic Policy Uncertainty Index, Purchasing Power  
Parity-Adjusted Gross Domestic Product WGHT  
6
5
13 0  
1
20  
110  
5
3
00  
60  
55  
50  
2
50  
10 0  
2
00  
1
50  
90  
1
00  
8
0
70
0
2
001 2003 2005 2007 2009 2011 2013 2015 2017 2019  
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019  
S&P500 volatility  
Eurostoxx 50 volatility  
Geopolitical Risk Index (GPR)  
5
4
3
2
1
0
6 00  
5
00  
00  
4
3
00  
00  
2
1
00  
0  
1 9 86 1 9 8 9 1 99219 95 1 998 20 012 0 0 42 0 0 7 20 1 0201 32 016 201 9  
volatility = 60-day moving average of the cross-sectional standard deviation of daily returns of the index constituents  
Source: Economic Policy Uncertainty, Bloomberg, IFO, Atlanta Fed, BC, BNP Paribas  
2
001 2003 2005 2007 2009 2011 2013 2015 2017 2019  
Indicators preview  
As usual around this time of the month, we have a heavy schedule of important releases: flash PMIs in various countries, business climate in Germany (IFO) and  
France, eurozone consumer confidence, University of Michigan household sentiment. In France we also have labour market data and in the US, several  
statistics with respect to housing. The ECB survey of professional forecasters will be interesting to check how growth and, in particular, inflation expectations  
have evolved. Finally, the highlight of the week will be the press conference after the ECB meeting, now that everybody has had enough time to digest the  
decisions of the previous meeting.  
Date  
Country/Region  
United Kingdom  
United States  
United States  
France  
United States  
Eurozone  
Japan  
France  
Germany  
Eurozone  
Eurozone  
Event  
Period  
Oct  
Oct  
Sep  
Oct  
Oct  
Oct  
Oct  
Oct  
Oct  
Oct  
Oct  
Oct  
Oct  
Survey  
--  
--  
-0.7%  
--  
--  
--  
--  
--  
--  
--  
--  
--  
--  
-0.8%  
--  
Prior  
-28  
-9  
1.3%  
106  
0.5%  
-6.5  
51.5  
50.8  
48.5  
45.7  
51.6  
50.1  
-0.500%  
0.2%  
51.0  
7.1%  
-2  
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
0/22/2019  
0/22/2019  
0/22/2019  
0/23/2019  
0/23/2019  
0/23/2019  
0/24/2019  
0/24/2019  
0/24/2019  
0/24/2019  
0/24/2019  
0/24/2019  
0/24/2019  
0/24/2019  
0/24/2019  
0/24/2019  
0/24/2019  
0/25/2019  
0/25/2019  
0/25/2019  
0/25/2019  
0/25/2019  
0/25/2019  
CBI Trends Total Orders  
Richmond Fed Manufact. Index  
Existing Home Sales MoM  
Business Confidence  
MBA Mortgage Applications  
Consumer Confidence  
Jibun Bank Japan PMI Composite  
Markit France Composite PMI  
Markit/BME Germany Composite PMI  
Markit Eurozone Manufacturing PMI  
Markit Eurozone Services PMI  
Markit Eurozone Composite PMI  
ECB Deposit Facility Rate  
Durable Goods Orders  
Markit US Composite PMI  
New Home Sales MoM  
Kansas City Fed Manf. Activity  
Machine Tool Orders YoY  
GfK Consumer Confidence  
IFO Business Climate  
ECB Survey of Professional Forecasters  
Total Jobseekers  
U. of Mich. Sentiment  
Eurozone  
Eurozone  
United States  
United States  
United States  
United States  
Japan  
Germany  
Germany  
Eurozone  
France  
Oct  
Sep  
Oct  
Sep  
Nov  
Oct  
-0.4%  
--  
--  
--  
--  
-35.5%  
9.9  
94.6  
3Q  
Oct  
--  
--  
3.3773e+06  
96.0  
United States  
Source: Bloomberg, BNP Paribas  
QUI SOMMES-NOUS ? Trois équipes d'économistes (économies OCDE, économies émergentes et risque pays, économie bancaire) forment la Direction des Etudes Economiques de BNP Paribas.
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