Head of Macroeconomic Research
Summary: Our Macro Chartmania series collects Macrobond data and focuses on a single chart chosen for its relevance. This week, we look at maritime data and especially Hong Kong's international cargo vessels traffic.
Click here to download this week's full edition of Macro Chartmania.
The current congestion situation in international ports, especially in South East Asia, resulting in cargos staying anchor and waiting for their turn to enter is likely to remain in place into 2022. Located at the doorstep of the Pearl River Delta, Hong Kong is one of the busiest container ports in China and in the world, along with Ningbo, Guangzhou and Shenzhen. There were only 1358 international arrivals of cargo vessels in last September – the last month for which data are available. This is one of the lowest figures on record. Before the outbreak, the number of arrivals was almost twice as high. In tonnage terms, the figure is striking too. In September, the tonnage was about 17.8 millions tons – a low point since 2000. In the below chart, we see the data expressed as a 12 month rolling sum. Congestion and bottlenecks in moving container traffic partially explain the bad numbers. The bottlenecks reflect distressed supply on the production side and the impact of the zero Covid policy in China. The policy will prevail at least until the 2022 Winter Olympics in Beijing. We estimate the shutdown of strategic ports during one month causes bottlenecks that take about 6 to 8 weeks to be absorbed. This was the case when the Chinese authorities closed the port of Yantian last June due to Covid cases. Natural disasters can make the situation worse too. In mid-October, the typhoon Kompasu scattered ships out of Hong Kong for a few days, for instance. Expect port congestion to weigh on the economic recovery into 2022 and contribute to overall inflationary pressures. Our baseline is that global central banks will need to hike interest rates much faster than anticipated next year to fight persistent inflationary pressures. The U.S. Federal Reserve and the European Central Bank are in the frontline.
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist
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