Macro-News round-up:
#MarketNews

In the last 48 hours we have had an absence of relevant macroeconomic data. However, today we will have the release of the US GDP data.
Today’s data should confirm or rectify the previous data published at the end of January.

As the most recent relevant information, orders for durable American products dropped in January for the first time in over four years, and company spending on equipment seemed to have abated, both of which were indicators that the economy had slowed down at the beginning of the year.

Customers’ top concerns in February were the state of the economy, particularly with regard to the labour market, and the impending presidential election. As a result, confidence fell following three consecutive months of gains.

Although housing price growth slowed during the fourth quarter of 2023 compared to the previous three-month period, annual home prices in the United States increased again in December.

Based on an upwardly revised 6.7% growth in November, annual home prices increased by 6.6%, according to a Federal Housing Finance Agency (FHFA) survey released on Tuesday.

China: Chinese developer Country Garden announced last week that it has been the target of a liquidation petition for failing to repay a $205 million loan, casting doubt on its chances of a debt restructuring and jeopardising Beijing’s attempts to bolster the real estate industry.

The petition was submitted by a creditor, Ever Credit Limited, a division of Kingboard Holdings, a company listed on the Hong Kong Stock Exchange, and Country Garden stated in a regulatory filing to the Hong Kong Stock Exchange that it would “resolutely” reject it.

In the last 12 months, the stock has lost more than 70% of its value.

A Country Garden liquidation would worsen the real estate crisis, increase the burden on its onshore lenders, and possibly postpone the possibility of a rebound in the Chinese economy as a whole as well as the real estate market.

Commodities: A greater rise in US inventories appears to be the reason behind the lacklustre trading of crude oil. This would mark the sixth straight week that US oil inventories have increased, assuming the EIA confirms the report. 

The decision made by OPEC+ about voluntary output cuts for the second quarter of 2024 is gradually coming into focus. The group may make an announcement regarding its decision during the first week of March. Given the decline in crude oil prices, it is anticipated that the group may decide to prolong the current cuts.

Due to the economic slump, demand forecasts are still modest in the short term, and the producers may need to continue making cuts in order to preserve market equilibrium.

Aluminium. According to the most recent research from Beijing Antaike Information Development Co., the country’s real estate sector’s sustained deterioration may be the main reason why China’s consumption of aluminium could slow down in 2024.

Geopolitics: Berlin, Warsaw, and Madrid were among the EU cities that disregarded comments made by French President Emmanuel Macron on Tuesday, in which he implied that the possibility of future Western army deployments in Ukraine could not be completely “ruled out.” 

Prior to Monday’s talks, Dutch Prime Minister Mark Rutte—who is vying to be NATO’s secretary general—told reporters that the topic of sending troops was not going to be the main focus. Instead, he centred attention on a Czech initiative that has the backing of fifteen European nations to purchase ammunition outside of Europe.

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