Despite the steady flow of negative news about protectionism and crises in emerging economies, global growth is holding up well in Q3. Moreover, the labour market has continued to strengthen, particularly in the US, making two more rate hikes this year a near-certainty. Admittedly, global manufacturing growth and world trade have slowed, but this is offset by strong services growth. Meanwhile, emerging market currencies have continued to weaken. But the problems are concentrated in Argentina and Turkey, whose currencies have fallen by far the most this year. And the damage from protectionism has so far been limited to a handful of sectors, such as steel and soybeans.
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