Global | Stable industry and resilient services, but the weak momentum persists

Summary

The global slowdown extends into 4Q19, as some incoming figures continue to be weak despite a better tone on trade negotiations and lower brexit risks. Services and domestic demand continue to sustain growth while manufacturing and trade have stabilized in Q3, but confidence data for Q4 have been mixed so far.

Key points

• Key points:
• Our BBVA-GAIN model suggests that the weak momentum of 3Q19 extends into 4Q19 (3.0% annualized).
• Hard data up to September ease concerns about a deeper global slowdown, mostly due to supportive private consumption and the level-off trade and manufacturing figures.
• Confidence data for 4Q19 shows some stabilization in the manufacturing sector, while services continue to soften. Overall, the concerns of industrial weakness spreading to domestic demand have not been dispelled yet.
• Risks remain tilted to the downside, and are mainly related with political issues such as trade disputes, Brexit or social unrest in Hong Kong and some Latin America countries.

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