China’s growth is predicted by the IMF to drop to 4.6% in 2024 as a result of the country’s foreign demand slowing down and the real estate sector’s ongoing difficulties. Georgieva, Managing Director, IMF: In the US, rate cuts are probably going to happen in a few months.
Yesterday, US stocks gained back the ground they had lost the day before. The NASDAQ gained 1.3%, and the S&P 500 increased by 1.25%. Equity futures appear to be doing well as well. Chinese stocks saw a little better day. The CSI only had a gain of 0.07%, while the Hang Seng increased by 0.52%.
In relation to macro data, even while it stayed below the breakeven 50 level, the manufacturing ISM increased significantly, and the prices paid component also increased, rising from 45.2 to 52.9. The index for new orders was likewise robust. The initial job claims was little bit higher than expected. The US Labour Report and the NFP Realise are later today.
Weekend TV interview with Jerome Powell is scheduled; if Powell departs from the previous message at the FOMC, it could be something to watch
UK: Governor Andrew Bailey of the Bank of England stated yesterday that inflation was “moving in the right direction” and that borrowing costs would be maintained “under review,” reversing the previous warning that rates would rise once more.
Members of the Monetary Policy Committee voted in favour of rate hikes and cuts at the same meeting for the first time since 2008. Swati Dhingra supported a cut of the same magnitude, Jonathan Haskel and Catherine Mann chose a 0.25 percentage-point increase, while six members decided to maintain rates at 5.25%.
All signs point to a change in attitude at the Bank of England. the comments of the Bank’s governor show this: “For me, the key question has moved from ‘How restrictive do we need to be?’ to ‘How long do we need to maintain this position for?'” he stated at a press conference.
According to surveys, investors continue to consider the possibility of four rate cuts this year. Simultaneously, the GBPUSD cable is approaching the highs of a 20-year bearish channel, leaving possible retracement zones nearby which would indicate a downtrend that would last for months, currently the GBPUSD is trading at 1.2750.
Commodities: Deflation risk seems to be happening. The FAO Food Price Index dropped to 118 index points in January 2024—a new low since February 2021—for the sixth consecutive month. Cereal prices dropped 2.2% to all-time lows in December 2020 due to a reduction in the price of wheat exported globally, fierce competition among exporters, and the influx of freshly harvested wheat into the countries of the southern hemisphere. Along with the continued slowdown in global demand and plentiful exportable supply, beef prices also decreased by 1.4%.
Geopolitics: Qatar said that Israel agrees to ceasefire proposal based on Al Jazeera comments. However, Hamas Official said few hours ago “We cannot say current stage of negotiation is zero, and at same time, we cannot say that we have reached an agreement” based on financialJuice.com.