Global Eco Pulse shows the impact of uncerntainty

Over recent weeks, one of our proprietary nowcasting tool — the Global Eco Pulse — has diverged meaningfully from traditional survey-based indicators such as the Global PMI. While PMIs remain a widely followed gauge of business sentiment, they are limited by their monthly frequency and slower responsiveness to real-time developments. In contrast, the Eco Pulse is built on high-frequency survey data capturing shifts in economic sentiment, offering a more forward-looking signal on global economic momentum than traditional hard data, which tends to reflect changes with a lag.

 As shown in the chart below, the Global Eco Pulse (red line, right-hand scale) has recently moved below the Global PMI (blue line, left-hand scale), having previously signaled a more constructive outlook throughout much of 2024. That relative outperformance proved correct at the time, as global activity was firm in early 2024, despite the lackluster PMI level. While the Global PMI (blue line, left-hand axis) remains near the neutral 50 mark — implying neither expansion nor contraction — the Eco Pulse (red line, right-hand axis) has rolled over sharply, reaching its most negative reading since the height of the 2022 slowdown. The current shift — with the Eco Pulse not only softening more visibly but also having reversed from a level well above the PMI to now below it— reflects a faster and more granular read of emerging macro headwinds, and reinforces the importance of tracking dynamic shifts in leading indicators.

This evolving backdrop coincides with renewed policy uncertainty in the U.S., where recent tariff announcements and a more protectionist tone from the administration have introduced downside risks to global trade and sentiment. Tariffs function much like a negative fiscal impulse, dampening demand while disrupting global supply chains. More broadly, heightened policy unpredictability weighs on financial conditions and corporate decision-making worldwide. While some hard data—such as industrial production or employment—has yet to reflect these shifts, we see this more as a timing lag than a contradiction, with broader effects likely to surface in the coming weeks or months unless tariff rhetoric and implementation de-escalate meaningfully. Our close monitoring of both high-frequency and traditional indicators continues to inform our strategy in a prudent and forward-looking manner.