Global Macro Scoreboard

Global Macro Scoreboard: Breaking Brexit

With the future of Brexit and EU Reform at inflection points, expectations are high for this week's European Council summit.

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The Scoreboard shows the global macro issues generating the most interest and momentum in the digital realm based on Predata signals that monitor online conversations about each issue. Signals are built based on digital traffic (in every available language) relevant to each issue and then correlated to a master signal covering all of the issues. The strength of the correlation, shown on the y-axis, determines an issue's rank on the Scoreboard.

At this week's European Council summit, EU leaders were supposed to give the Commission the green light to proceed to the next phase of Brexit negotiations. Instead, after the fifth round of negotiations between Brussels and London last week, chief EU negotiator Michel Barnier admitted “that talks had reached 'deadlock.” Both Brexit and EU Reform climbed to the top of the Scoreboard this week, a sign that macro observers have high expectations for this week's summit. Predata's signal for digital activity related to the EU is at its highest level ahead of an October European Council since 2014, when the Juncker Commission was installed. High levels of interest in the EU's institutions, elections in Austria and the Czech Republic, the ongoing crisis in Spain, Angela Merkel's CDU's subpar performance in a state election, and Emmanuel Macron's ongoing struggle for labor law reform in France all point to limited room to maneuver for the heads of state in Brussels on Thursday and Friday.

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When Will China's Debt Come Due?

Markets continue to pay attention to debt in China. Though the government has moved to clamp down on shadow banking and excessive borrowing, Bloomberg reported that new credit exceeded projections in September and that lending is actually increasing in 2017. Our signal that tracks the risk of major corporate defaults in China is muted for now. The country's most significant political event — the Communist Party's quinquennial national congress — begins Tuesday, and state economic planners have kept a tight hold over markets in the lead-up. After the congress and Xi Jinping's expected consolidation of power, the reins could loosen.

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