UK: Monthly GDP Expected to Rebound Modestly After October’s Weakness
A key event in developed markets next week will be the release of the UK’s monthly GDP figures, as the country aims to recover from a period of economic weakness experienced in October. Economists predict a modest rebound, offering hope for a return to growth.
Meanwhile, in the United States, the focus will be on consumer price inflation data. The Federal Reserve seems to be adopting a more relaxed stance on inflation, with recent minutes from the December FOMC meeting suggesting diminished upside risks. This improved outlook has prompted officials to predict a lower path for the Fed funds rate in 2024 than previously anticipated.
The core personal consumption expenditures (PCE) deflator has shown more favorable month-on-month readings compared to the consumer price index (CPI) over the past six months. However, analysts believe that the CPI report will also reflect a soft print this month. Factors contributing to this expectation include falling gasoline prices and more favorable housing rent data.
It is anticipated that core CPI will dip below 4% year-on-year for the first time since May 2021. This development is likely to bolster the Federal Reserve’s confidence in the sustainability of inflation, progressing towards the target rate of 2% by mid-2024.
We expect to see a soft CPI print this month, primarily driven by declining gasoline prices and the calming of housing rent data, said an economist.
These upcoming key events will provide insights into the economic performance of developed markets and could have significant implications for policymaking and investment decisions.
As always, investors and market participants will closely monitor these data releases, seeking cues on economic trends and potential market reactions. The outcome of these events could shape the near-term outlook for various sectors and asset classes.
Throughout the week, experts and analysts will continue to analyze the data and offer their perspectives on the potential impact on monetary policy, fiscal measures, and market sentiment.
The developments in the UK and the US will be of great interest to individuals, businesses, and investors worldwide. While the focus remains on economic indicators, it is essential to consider the broader implications for global markets and economies.
As the events unfold next week, market participants will be keen to gather insights, engage in informed discussions, and make well-informed decisions.
