Charts of the Week: From Cinema to Sahm
- By Matthew Tibble
- 2 min read
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Summary
- The Sahm recession indicator is not flashing.
- Cinemagoers are going again.
- Q2 2022’s top FX trades can teach us a thing or two.
- Miners are pulling out of ethereum.
Recession? Not According to Sahm
Economist Claudia Sahm has shown that each US recession since 1970 has started with an increase in the unemployment rate of 50bp or higher relative to the previous 12-month low (Chart 1). This indicator suggests the risks of imminent recession are low given the recent May NFP figures.
Cinemagoers Are Going Again
So far this year, total box office gross has reached $4bn. This is 236% higher than 2021 and 130% higher than 2020, but still about a third below pre-pandemic 2018 and 2019. But if we look at just the top 5 grossing movies, the recovery is much stronger (Chart 2). We think this implies an interesting behavioural shift.
2022’s Top-Three FX Trades
We recently looked at the top three FX trades for Q2 2022 to learn some lessons. These were MXN/CLP, USD/HUF, and SGD/NOK (Chart 3). They suggest focusing on currencies whose central banks are noticeably behind or ahead of the curve and on currencies that have a high beta to stocks or commodities. But do not assume these top three trades will continue to outperform.
Miners Are Pulling Out of Ethereum
Ethereum continues to struggle to maintain any persistent rally above $1,000, and it has been underperforming bitcoin through most of the selloff. When prices fall too low and profitability becomes harder to achieve, miners switch off their rigs. This results in a falling hash rate, which is a bearish sign for ethereum. Indeed, the 30-day moving average of the hash rate is down 13% since the start of June (Chart 4).