World IP (Industrial Production) continues to show divergent trends in developed and emerging markets. The decline in growth in the BRIC countries looks as if it has stopped, but the OECD countries (most of which, with the key exceptions of Mexico and Turkey, are developed countries) are still dragging along at around 1 percent. That includes Germany which is still strong. Not exactly boom conditions for the rest.
However, the world IP diffusion index suggests growth is accelerating again. A diffusion index will tend to lead changes in the underlying data. Notice how the diffusion index suggested a renewed acceleration in world growth early this year but turned down after the Japanese earthquake and US mid-west floods. If -- a big if -- Europe manages to avoid recession, my guess is that the world recovery will accelerate. In my view, to avoid a European relapse into recession, the ECB will have to cut rates. Which they prolly won't. Still, they might. So we keep watching.