US GDP Growth And Nvidia Q4 Earnings Report In The Spotlight
The US economic growth while economic confidence slides, the European Central Bank’s (ECB) interest rates and Japanese inflation will be among the most important conversation topics in global markets for the rest of this week.
Later today, Nvidia will release its fourth-quarter financial results as investors scrutinise Chinese startup DeepSeek that has delivered notable results with AI technology ostensibly cheaper than its rivals.
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US GDP Q4 2024 Report
On Thursday, the Bureau of Economic Analysis will publish the preliminary US GDP data for the fourth quarter of 2024. Economists expect the Q4 2024 GDP growth figure to come in at 2.3% on an annualised basis.
Yesterday, a report showed that economic confidence in the US slumped, deteriorating at its sharpest pace in three and a half years in February, with businesses and consumers citing the impact of tariffs on imported products. Analysts stressed that, even though the US administration imposed tariffs only on Chinese products, confidence was already taking a hit.
ECB’s Schnabel And Nagel Comment On Rates
European Central Bank (ECB) board member Isabel Schnabel suggested that interest rates are no longer a material drag on eurozone’s economic growth. The German policymaker noted that “the natural rate of interest in the euro area has increased appreciably over the past two years, and even more so than what market-based real forward rates would suggest.”
Schnabel, who is considered one of the “hawkish” members of the ECB board, noted that “the fact that growth remains subdued cannot and should not be taken as evidence that policy is restrictive.” Earlier in February, Schnabel had spoken again in favour of a more controlled approach when it comes to reducing borrowing costs.
Joachim Nagel, President of the Deutsche Bundesbank and member of the ECB’s governing council said that the ECB was likely to achieve its target this year. Nagel noted that “overall...the outlook for prices is fairly encouraging,” but warned about "persistently elevated core inflation and the undiminished strength of services inflation." The German banker suggested that eurozone’s central bank has got closer to leaving a restrictive policy stance.
Tokyo CPI February 2025 Report
On Friday, market analysts will have the opportunity to scrutinise the Tokyo CPI inflation report for the month of February. The headline Tokyo CPI for January climbed 3.4% on an annualised basis, recording a jump when compared to December’s reading. When it comes to core CPI, it is expected to come in at 2.3% on a yearly basis versus 2.5% prior.
The Japanese yen has strengthened in the last few days on the back of robust solid wage growth and inflation data while Bank of Japan (BoJ) policymakers have made the headlines with “hawkish” comments about increasing borrowing costs. Last week, BoJ’s governor Kazuo Ueda said that “from a long-term perspective, rising interest rates will help improve financial institutions.”
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