Investment Institute
Weekly Market Update

Take Two: US growth beats expectations; ECB leaves rates on hold

  • 29 January 2024 (3 min read)

What do you need to know?

The US economy grew faster than expected in the final three months of 2023, delivering 3.3% annual GDP growth, well ahead of the 2% analysts had predicted. While the figure represents a slowdown from the previous quarter’s 4.9%, the expansion was underpinned by consumer spending and exports. Meanwhile the US composite Purchasing Managers’ Index (PMI) rose to a seven-month high of 52.3 in January from 50.9 in December with gains in both manufacturing and services activity. Earlier in the week, the Dow Jones Industrial Average and S&P 500 indices both reached fresh highs.


Around the world

European Central Bank President Christine Lagarde said it was “premature” to discuss easing monetary policy as the central bank kept its key interest rate on hold at 4.0%. However, tight financial conditions are dampening demand, helping to lower inflation, the bank said, reiterating its “data-dependent” approach to how long rates will remain high. Separately, Eurozone business activity fell at its slowest pace for six months in January, according to the latest PMI data. Business optimism has improved, though attacks in the Red Sea have disrupted shipping routes and supply chains. Elsewhere, the Bank of Japan and Bank of Canada both also left rates on hold last week.

Figure in focus: One trillion yuan

China’s central bank announced a 50-basis point cut to the amount of cash banks must hold in their reserves, injecting one trillion yuan (around $140bn) into the world’s second largest economy. The largest cut to the reserve requirement ratio in two years from the People’s Bank of China (PBoC) adds support for a recovering fragile economy amid the country’s housing crisis and weakening global demand. It also announced new rules to improve commercial property loans, raising hope for the real estate sector, though analysts believe more stimulus is needed.


Words of wisdom

Scope 3: Greenhouse gas emissions which are found along a company’s value chain, rather than coming directly from company-controlled sources (scope 1) or indirectly from operational energy use (scope 2). Scope 3 emissions account for both upstream, i.e., activities before the company’s own operations, and downstream – those after. In aggregate, scope 3 emissions account for 79% of total emissions, two-thirds of which come from the use of products. Scope 3 emissions reporting is set to become mandatory for many companies operating in the European Union, and similar disclosure rules are also due to be introduced for US companies doing business in California.

What’s coming up?

On Tuesday, the Eurozone publishes a flash estimate for fourth quarter GDP growth along with a spate of surveys covering January, including Economic and Industrial Sentiment and Consumer Confidence indices. On Wednesday, the US Federal Reserve meets to decide on interest rates while the Bank of England convenes on Thursday. Also on Thursday, Eurozone flash inflation figures for January are released, as well as final January PMI numbers for the Eurozone, UK, US, Japan and China. The US reports its latest employment numbers on Friday.

Pesky Data
Macroeconomics

Pesky Data

  • by Gilles Moëc
  • 19 February 2024 (10 min read)
Investment Institute
Take Two: US inflation eases; Japan falls into recession
Macroeconomics Weekly Market Update

Take Two: US inflation eases; Japan falls into recession

  • by AXA Investment Managers
  • 19 February 2024 (3 min read)
Investment Institute
Zoom on the Boom
Macroeconomics Viewpoint Chief Economist

Zoom on the Boom

  • by Gilles Moëc
  • 12 February 2024 (10 min read)
Investment Institute
Take Two: Eurozone avoids recession; Fed and BoE keep interest rates on hold
Macroeconomics Weekly Market Update

Take Two: Eurozone avoids recession; Fed and BoE keep interest rates on hold

  • by AXA Investment Managers
  • 05 February 2024 (3 min read)
Investment Institute
Deferred Confidence
Macroeconomics

Deferred Confidence

  • by Gilles Moëc
  • 05 February 2024 (10 min read)
Investment Institute
Take Two: US growth beats expectations; ECB leaves rates on hold
Macroeconomics Weekly Market Update

Take Two: US growth beats expectations; ECB leaves rates on hold

  • by AXA Investment Managers
  • 29 January 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.