Our proprietary World Inflation Nowcaster has seen a very sudden and rapid rise – a trend seems to have begun, and we expect it to continue in the quarters ahead. It has already passed the symbolic level of 0.5 standard deviations, which usually implies an average surprise of 38bps. This would see the current consensus forecast of 2.8% for global inflation in 2021 revised up to 3.2%. The last times we saw readings this high were May 1995, March 2000 and January 2011. All of these episodes were followed by inflation beating expectations by an average of 0.6%: +0.5% in 1995, +0.5% in 2000 and +1.0% in 2011. If this was to happen again, then the US CPI would reach a yearly growth rate of 3.6% – levels we have not seen since 2011 and the peak of oil prices, or since 2008 and the aftermath of the strong growth momentum of 2005-2007.
Source: Bloomberg, Unigestion. Data as at 16 April 2021.
The information and data presented in this page may discuss general market activity or industry trends but is not intended to be relied upon as a forecast, research or investment advice. It is not a financial promotion and represents no offer, solicitation or recommendation of any kind, to invest in the strategies or in the investment vehicles it refers to. Some of the investment strategies described or alluded to herein may be construed as high risk and not readily realisable investments, which may experience substantial and sudden losses including total loss of investment.
The investment views, economic and market opinions or analysis expressed in this page present Unigestion’s judgement as at the date of publication without regard to the date on which you may access the information. There is no guarantee that these views and opinions expressed will be correct nor do they purport to be a complete description of the securities, markets and developments referred to in it. All information provided here is subject to change without notice. To the extent that this page contains statements about the future, such statements are forward-looking and subject to a number of risks and uncertainties, including, but not limited to, the impact of competitive products, market acceptance risks and other risks.
Data and graphical information herein are for information only and may have been derived from third party sources. Although we believe that the information obtained from public and third party sources to be reliable, we have not independently verified it and we therefore cannot guarantee its accuracy or completeness. As a result, no representation or warranty, expressed or implied, is or will be made by Unigestion in this respect and no responsibility or liability is or will be accepted. Unless otherwise stated, source is Unigestion.
Past performance is not a guide to future performance. All investments contain risks, including total loss for the investor.