This week’s 4 must-see charts
International exposure to Russian banks, a turnaround in the Eurozone’s inflationary trends, an uptick the Baltic Dry index, and the ongoing strength of the euro.
We bring you some of our favourite analysts’ picks of the most important graphs this week.
Alexander Dryden, analyst at JP Morgan Asset Management
Financial and economic sanctions by the West against Russia are a key theme at the moment. This chart shows the exposure of banks in different European countries to Russia, highlighting the economic and financial effects that are likely to become apparent in coming weeks.
Our research suggests that European banks have $184bn (£111bn) in total foreign claims against Russian banks, with France, Germany and Italy the most exposed. As sanctions come into force, it may create more volatility in both energy and financial markets in Europe.
Christian Schulz, senior economist at Berenberg
Eurozone real M1 money supply tends to herald turning points some three quarters ahead. M1 growth turned up in spring 2012, and accelerated as the ECB became more more aggressive over the summer of 2012. Real M1 correctly predicted the Eurozone’s economic rebound in spring 2013, and now heralds roughly trend growth from Q1 2014 onwards.
Julian Jessop, chief global economist at Capital Economics
We would be wary of interpreting the recent slump in the price of copper as a warning sign of broader problems in the global economy. This slump has been compounded by factors specific to the industry, like the impact of China’s credit clampdown on the use of metals for financing. And as it happens, the Baltic Dry Index of global shipping costs, a rival bellwether, is actually rebounding again.
However, we would put more weight on direct evidence from other economic indicators (like the purchasing managers' index), which have held up pretty well.
Jeremy Cook, chief economist at World First
Movements in the euro have been particularly annoying this year for those of us who are eager for the ECB to loosen monetary policy soon. A combination of flight from emerging markets into havens and a reversal of carry trades has taken it higher, alongside ECB intransigence.
The key to further gains may be whether recent diversification away from the dollar by the world’s central banks, particularly China’s, continues. As our chart shows, it has certainly helped in the past.