Outlook for GDP growth, inflation, interest rates and exchange rates
The latest economic indicators updated on February 20, 2023 and the coming calendar
In the manufacturing sector, the global Purchasing Managers’ Index (PMI) showed a slight improvement in January following ten months of declines though still in contraction territory (49.1 points). With the exception of Japan, where the index remained stable, 26 of the 33 countries for which data for January was available reported increases.
In the US, financial conditions have eased in recent months and weighed on the effectiveness of the Fed’s policy tightening. Jerome Powell recently gave the impression of not being too concerned, so markets rallied, and financial conditions eased further despite the hawkish message from the FOMC. In the Eurozone, another rate hike by the ECB and the commitment to raise rates again in March caused a huge drop in bond yields because markets expect we’re getting closer to the terminal rate. It reflects a concern of not being invested in the right asset class when the guidance of central banks will change: based on past experience, one would expect that bond and equity markets would rally when central banks signal that the tightening cycle is (almost) over
The latest economic indicators updated on February 6 2023 and the coming calendar
Some discrepancies have become apparent in the most recent surveys. Uncertainty about US economic policy, based on media coverage, has continued on an upward trend since mid-April 2021, on the back of the tightening of monetary policy by the Federal Reserve. The European Commission's economic uncertainty index fell slightly, due to less uncertainty in the various sectors of activity, with the exception of households.
The worldwide fall in Covid-19 cases has continued for the fifth consecutive week. 1.8 million new cases were reported between 20 and 26 January, down 27% from the previous week. The weekly GDP proxy indicator has recovered significantly in Germany, France, Belgium and Italy, while it remains relatively stable in Spain. In the United States, the United Kingdom and Japan, an increase over the latest data points can be noted
The latest economic indicators updated on January 30 2023 and the coming calendar
The latest economic indicators updated on January 23, 2023 and the coming calendar
The second half of 2022 was marked by a significant and generalised fall in global transportation costs, accompanied by a freeing up of supply chains. Global maritime freight fell back to levels almost five times lower than at the peak in autumn 2021. Only transportation costs for liquefied natural gas (LNG) increased significantly, due to Russian gas shortages, although prices have also fallen back since December.
Between 4 and 10 January, 3.4 million new cases of Covid-19 were recorded worldwide, representing a fall of -3% compared to the previous week. This is the third consecutive week of falling infections following seven weeks of almost continuous increases. The number of new cases continues to fall sharply in South America (-24%) and, to a lesser extent, in Europe (-12%).
The latest economic indicators updated on January 16, 2023 and the coming calendar
The global manufacturing PMI edged down in December on the back of a new, significant decline in the US and for the second month in a row an increase in the euro area where the improvement is broadbased.
The latest economic indicators updated on January 9 2023 and the coming calendar
From Adam Smith to the present day, nations' wealth has been built on fossil fuels. Coal, oil and gas have become a vital part of our lifestyles. In 2022, they still account for 83% of the world’s primary mix, that is to say what essentially feeds economic activity.
2022 was a year of profound transformation, of shifting geopolitical and economic paradigms. Looking ahead, 2023 should see a change of direction in key economic variables. Headline inflation should decline significantly, central bank rates should reach their cyclical peak and the US and the euro area should spend part of the year in recession. 2023 can be considered as a year of transition, paving the way for more disinflation, gradual rate cuts and a soft recovery in 2024.
The latest economic indicators updated on January 2 2023 and the coming calendar
From an economic perspective, 2022 will go down in history as the year in which elevated inflation made a surprising comeback forcing major central banks to start an aggressive tightening cycle. It is highly likely that in twelve months’ time we will look back at 2023 as a recession year, a year of disinflation, and a year in which official interest rates reached their terminal rate and stayed there. As usual, the list of ‘known unknowns’ is long. Energy prices might increase again after their recent decline, disinflation might be slower than expected, policy rates might peak at a higher level than currently priced by markets, and the recession might be deeper and longer than anticipated
The markets overview updated on the December 12, 2022: Money & bond markets, exchange rates, commodities, equity indices, performances, and much more.
