Investment Institute
Weekly Market Update

Take Two: Eurozone inflation eases; Fed wants more data before rate decision

  • 08 April 2024 (3 min read)

What do you need to know?

Eurozone inflation eased unexpectedly to 2.4% in March from 2.6% in February, boosting the case for the European Central Bank (ECB) to cut interest rates. Food, energy and industrial goods drove the headline figure down – while core inflation, excluding food, energy, alcohol and tobacco also fell, to 2.9% from 3.1%. In addition, Eurozone business activity returned to growth in March for the first time in 10 months, according to the composite Purchasing Managers’ Index (PMI). It rose to 50.3 from 49.2 in February – a reading above 50 indicates expansion – as stronger services activity offset a contraction in manufacturing.


Around the world

More data is needed before US interest rates can be cut, and it is too soon to tell whether recent higher-than-expected inflation readings represent “more than just a bump”, Federal Reserve (Fed) Chair Jerome Powell said in a speech. Meanwhile US business activity continued to expand in March with the composite PMI at 52.1, marginally down from February’s 52.5. Elsewhere, a Bank of Japan (BoJ) survey showed service sector optimism rose to a 33-year high in the first quarter, helped by increasing tourism and profits from higher prices, adding to speculation the BoJ could raise interest rates again this year.

Figure in focus: 6.0%

South Asia is set to remain the fastest growing regional economy globally for the next two years, driven by India, the World Bank said as it forecast 6.0% growth for the region in 2024 and 6.1% in 2025. The East Asia and Pacific region is also growing faster than the rest of the world, but slower than before the pandemic, the World Bank said. It expects growth there to slow to 4.5% in 2024 from 5.1% last year and said while recovering global trade and easing financial conditions will support the region, “increasing protectionism and policy uncertainty will dampen growth”. 


Words of wisdom

Inflation Reduction Act: Introduced in the US in 2022, the Inflation Reduction Act (IRA) is designed to increase clean energy investment, cut healthcare costs, and raise tax revenues. It is expected to drive growth and innovation, helping the private sector – and investors – decarbonise emission-intensive sectors. The US saw $239bn in new investment in the manufacture and deployment of clean energy, clean vehicles, building electrification and carbon management technology in 2023, up 38% from 2022 according to research firm Clean Investment Monitor. A record $67bn of this came in the fourth quarter of 2023, a 40% increase on the same period in 2022.

What’s coming up?

On Wednesday, the US issues its latest inflation figures while the minutes from the last Fed meeting are published. Wednesday also sees the Bank of Canada convene to set interest rates; the ECB holds its own monetary policy meeting on Thursday when China publishes its inflation data for March. The UK issues its GDP numbers for February on Friday. 

What will it take?
Macroeconomics

What will it take?

Investment Institute
US reaction: Fed unmoved on rates, tapers QT
Macroeconomics Market Alerts

US reaction: Fed unmoved on rates, tapers QT

Investment Institute
Take Two: US inflation rises more than expected; ECB hints it may cut rates soon
Macroeconomics Weekly Market Update

Take Two: US inflation rises more than expected; ECB hints it may cut rates soon

  • by AXA Investment Managers
  • 15 April 2024 (3 min read)
Investment Institute
Letter from China
Macroeconomics

Letter from China

Investment Institute
Saved by Supply
Macroeconomics

Saved by Supply

Investment Institute
Take Two: Eurozone inflation eases; Fed wants more data before rate decision
Macroeconomics Weekly Market Update

Take Two: Eurozone inflation eases; Fed wants more data before rate decision

  • by AXA Investment Managers
  • 08 April 2024 (3 min read)
Investment Institute

    Disclaimer

    This website is published by AXA Investment Managers Australia Ltd (ABN 47 107 346 841 AFSL 273320) (“AXA IM Australia”) and is intended only for professional investors, sophisticated investors and wholesale clients as defined in the Corporations Act 2001 (Cth).

    This publication is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments, nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.

    Market commentary on the website has been prepared for general informational purposes by the authors, who are part of AXA Investment Managers. This market commentary reflects the views of the authors, and statements in it may differ from the views of others in AXA Investment Managers.

    Due to its simplification, this publication is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this publication is provided based on our state of knowledge at the time of creation of this publication. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    All investment involves risk , including the loss of capital. The value of investments and the income from them can fluctuate and investors may not get back the amount originally invested.