IMF optimism and Eurozone GDP data attract attention

January 31, 2023 10:38

The International Monetary Fund (IMF) raised its projection for global growth this year, citing greater-than-anticipated resiliency in economies around the globe and adopting a more positive tone than in its reports from the previous year. The IMF suggests that global growth will reach 2.3%, 0.2% higher than its previous forecast. IMF’s analysts forecast that the UK will be the only G7 economy to fall into negative growth in 2023.

Investors and traders are focused on interest rate decisions coming from the Federal Reserve, the ECB and the BoE, due later this week. Data regarding Eurozone’s GDP growth and earnings reports from Exxon Mobil, Pfizer and McDonald’s will be in the spotlight.

German retail sales figures disappoint

December retail sales figures in Germany disappointed market analysts. German retail sales fell by 6.4% and 5.3% on a year-to-year and monthly basis, respectively. Economists polled by Reuters had forecast a 0.2% rise on a month-to-month basis.

Preliminary GDP data coming from Germany showed that the Eurozone’s largest economy shrank by 0.2%, on a quarterly basis, in the last quarter of 2022. Commerzbank’s analysts wrote in their report that “contrary to guidance by the Federal Statistical Office (Destatis), the Q4 German GDP declined somewhat on Q3 (-0.2%). This was mainly due to private consumption. We still expect German GDP to shrink by 0.5%.”

Eurozone preliminary Q4 2022 GDP report expected today

Eurostat will release preliminary data regarding the euro bloc’s GDP growth in the last quarter of 2022. Economists forecast that the eurozone’s economy recorded zero growth on a quarterly basis.

During the third quarter of 2022, the euro bloc’s economy had grown by 0.3% on a quarter-to-quarter basis. The report could influence the euro’s value against the US dollar and the British pound.

Statistics NZ to publish New Zealand’s Q4 2022 Unemployment Rate

Statistics New Zealand is expected to publish its Q4 2022 unemployment rate report. Economists at the ANZ bank forecast the rate to fall to 3.2%. Westpac’s analysts tend to disagree, suggesting that the country’s unemployment rate remained unchanged at 3.3%.

They have also noted that the Reserve Bank of New Zealand (RBNZ) will limit its anticipated benchmark interest rate rise to 50 basis points. The RBNZ’s labour market forecast published in November said that the unemployment rate would climb steadily to 5% by March next year.

Caixin Manufacturing PMI January 2023 likely to tick higher 

The Caixin Manufacturing PMI is published by IHS Markit and is based on sets of data provided by purchasing managers in manufacturing sector companies. Market analysts suggest that the Caixin Manufacturing PMI will come in at 49.5, a bit higher than December’s figure (49.0). The index has stayed below the 50-point mark for five straight months.

A survey by Standard Chartered noted that “confidence among small businesses was better in January than in December, with real estate, transport, accommodation and catering activity seeing a sharp rebound.”

Earnings reports

It is earnings report season, so Exxon, Pfizer, McDonald’s and AMD will release today their sets of data for the last quarter of 2022.

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

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