Shipping forward looking variables, policy uncertainty and global macro-factors

Abstract

This paper investigates whether Economic Policy Uncertainty and other global macroeconomic factors can explain any portion of the variation observed in the returns of two major shipping forward looking variables, namely ship orderbook and freight rate spreads. The results show that the Economic Policy Uncertainty is significant when explaining the orderbook returns but not the freight rate spread returns. On the other hand, macroeconomic factors such as the University of Michigan Consumer Sentiment Index and the G7 Industrial Production Growth cannot be utilized as determinants of the selected shipping forward looking variables in question, across all the selected shipping segments.