Is the global economy slowing? As with much in economics, the response is to sit on the fence and wait and see. And the justification for such procrastination is that there is just too much contracdictory evidence. One fascinating developement so far in 2014 has been the outperformance of bonds over equities, something that most pundits did not predict at all. Similarly real yields on index linked bonds have fallen. But the monthly indicators measuring the real economy do not really back this up. The global PMI is 53.5, suggesting decent if not stellar growth, albeit they have weakened slightly since the autumn of last year. The OECD lead indicator rate of growth has also weakened marginally but neither are pointing to a marked slowdown. It is a bit of a mystery. Possible explanations are the weak recovery in OECD investment from the recent cyclical trough and the problems in the emerging economies whose demand for US treasuries remains as high as ever. But as I said, we will have to wait and see and don't sell bonds yet.