Markets focus on Australian GDP and Eurozone HICP data
A GDP report published in Australia showed that its economy expanded 0.5%, on a quarter-to-quarter basis, in the last quarter of 2022. The Institute for Supply Management (ISM) will publish its Manufacturing and Services PMIs which could cause some US dollar volatility. St. Louis Federal Reserve President James Bullard told Reuters reporters that “soft landing is feasible in the US if the post-pandemic regime shift is executed well.”
Australian GDP rises in Q4 2022
The Australian Bureau of Statistics (ABS) published its Q4 2022 GDP report. According to the report, the Australian economy grew 0.5% on a quarterly basis in Q4 2022. Economists note that the country’s GDP rose by 2.7% in 2022, lower than the 5.9% figure recorded in 2021.
A report by the National Australia Bank (NAB) noted that “looking forward, we see growth slowing sharply as consumer spending comes under pressure from both higher rates and inflation.” NAB is expecting economic growth to slow to 0.7% over 2023 and 0.9% in 2024.
At the beginning of February, Australia’s Treasurer Jim Chalmers said that “the expectation of the Treasury forecasters is higher interest rates combined with difficult global conditions will slow our economy considerably, but they don't expect at this point a recession here in Australia.”
Eurozone HICP preliminary data due on March 2nd
Eurostat will release the Eurozone's Harmonised Index of Consumer Prices (HICP) preliminary data for February. Headline inflation is expected at 8.7%, on an annualised basis, against 8.5% in January while core inflation is set to remain unchanged at 5.2%. Markets are pricing in a 50 basis point hike at the ECB meeting in March.
China’s Manufacturing PMI report
China’s Federation of Logistics and Purchasing (CFLP) will release its Manufacturing PMI January report on Wednesday. Market analysts suggest that the country’s Manufacturing PMI dropped to 48.9 in the first month of 2023, indicating activity contraction.
A report published on January 31st had shown that China’s factory activity rose (50.1) for the first time since August. At a news conference last week, a Chinese commerce ministry spokesperson said that the recovery momentum in the country’s consumer market was strong in January, adding that “the government will take more measures to revive and expand consumption.”
US ISM Manufacturing and Services PMIs to be scrutinised by experts
This week, the Institute for Supply Management (ISM) will publish the Manufacturing and Services PMIs (February 2023) which are expected to provide valuable insights regarding the condition of the US economy. The Manufacturing PMI is expected to come in at 47.9 and the Services PMI at 52.4. Market analysts note that the services index accounts for nearly 80% of the US GDP. Economists don’t expect a significant change of strategy by the Fed as long as the PMI remains above the 50 mark.
Eurozone's unemployment rate likely to have dropped in January
The eurozone’s unemployment rate in January will be revealed by Eurostat on Thursday. Economists expect a slight rate drop to 6.5% from 6.6% recorded in December. If the forecast comes true, the figure will highlight the labour market's strength even as the economy seems to be losing steam.
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