Global Inflation and GDP Updates in Focus
As 2023 nears its end, a fresh set of inflation data from the UK, Eurozone, Japan, and Canada, alongside core PCE data from the US, is set to capture market attention. This data arrives at a pivotal moment when final Q3 GDP figures from the US and UK are also expected, offering insights into economic performance. Additionally, the culmination of the year’s central bank meetings, particularly in Japan and Indonesia, will provide further cues on future monetary policies, shaping expectations for 2024.
Monetary Policy Directions and Economic Sentiments
Following the final Fed meeting of the year, expectations are high for potential rate cuts, with markets nearly fully pricing in a 50 basis point cut by May, as indicated by the CME FedWatch tool. This expectation is reinforced by the Fed’s signals of possible easing up to 75 basis points in 2024. Such policy directions are crucial as they influence financial conditions and economic momentum, as evidenced by the recent PMI data suggesting a potential easing in the CPI despite an uptick in economic activity in the US.
Sectoral Performance and Future Outlook
Sector-specific data, particularly PMI surveys, reveal a mixed economic scenario where manufacturing continues to decline across major economies, contrasting with modest growth in services in the US and UK. These trends highlight divergent economic trajectories within the G4, influenced by varying financial conditions. Additionally, upcoming data on consumer confidence and housing markets, particularly in the US, alongside inflation updates from Canada, will further delineate the economic landscape as stakeholders strategize for the upcoming fiscal year.
This week’s economic updates are critical for investors and policymakers as they provide a clearer view of the global economic conditions and help in strategizing for the challenges and opportunities of 2024.