I’m not going to weigh-in on the ‘trade war’ or ‘trade skirmish’ which has been generating numerous headlines lately, but instead, I would like to focus in this article on the boom in global trade growth. The turnaround in global trade was a big non-consensus call of ours in 2016 and helped underpin a bullish global macroeconomic view which has ended up driving big moves in the major asset classes (stocks and bonds). 

In fact the only thing I would mention in passing in regards to the potential trade war/skirmish is that it’s great timing, because if you *had* to have it happen it would be better when global trade growth is improving and you could even argue that the global economy can just absorb such headwinds at this stage of the cycle. This would be in contrast to were global trade growth to be decelerating and increased protectionism at that point would accentuate that downward momentum.

Anyway, if nothing else it’s nice to reflect on some positive macro data as the market loses its head.

The main points/findings on global trade growth are: 

-Both global trade and industrial production growth are running at a solid pace.

-Emerging markets, in particular, have seen a rapid acceleration in export and import volumes.

-Globally, trade growth appears to be in the middle of a synchronized upturn.

-There are however some doubts cast on the picture with the easing off in shipping cost indexes.

1. Global Trade and Industrial Production: The first chart I wanted to share is a key one as it gives reference to the inter-linkages between global trade and wider economic activity (i.e. greater levels of economic activity tend to flow through to higher export/import demand, and greater levels of import/export volumes tend to drive and broaden economic activity globally as growth in import oriented economies flows through to export-oriented economies). Anyway, the key point is that industrial production growth is running at a solid pace and hence reinforces the revival in global trade growth.