Weekly Data Summary Report
As of March 22, 2024
In this report, we will assess major economies, including the United States, the Eurozone, Japan, Australia, the United Kingdom, and Canada, mainly based on their economic indicators and economic events that have occurred within this week.
Australia
Despite the last rate cut, Australian labor market conditions got worse with a cutback in the number of full employment, while the participation rate also dropped to 66.8%. All of these are bolstering two more rate cuts, which 77% have already priced in May, as per a Bloomberg source.
Japan
The Bank of Japan held the interest rate high despite showing some signs of weakness in the economic outlook and higher inflationary pressures on consumption. What is more concerning is the wage inflation that keeps the BOJ in check, and yet the BOJ is also raising the possibility that if all aligns, then we are likely to see more rate hikes coming in unless the economy is in “bad shape.” In fact, we are seeing a softer figure for the national inflation in February, which is also boosting even more on having rate hold until June or July.
Canada
Canada’s economy is growing slowly but steadily with a multiple easing from the Bank of Canada rate decision. Yet we remain seeing a drawback in demand consumption, a weak labor market, high household debt, and inflation is rising above the restrictive level, especially concerns on the tariff war between the US and Canada are not going nowhere. Therefore, all of these can potentially lead the consumer to continue spending more cautiously and pose challenges to a more robust recovery. According to BOC’s Gov. Macklem, “Broad-based and prolonged tariffs could lead to recession,” hinting at a serious threat coming to drag economic down if both Trump and Canada don’t reach any agreement any time soon. Furthermore, the market downgraded the odds from 43% to 30% in favor of the rate cut in April. All eyes locked on Trump’s reciprocal tariff on April 2.
The United Kingdom
The Bank of England held the rate tight at 4.5%, adopting a gradual approach to easing the monetary policy, although this meeting seems to have more of a hawkish tone. This comes when persistent wage inflation and cost of living are alerting the inflation risk pose to economic growth while the unemployment rate remains a concern. Therefore, a fragile recovery with low productivity, high debts, high inflation, and trade war risking every sight—all of these are heightening the risk of stagflation in the near future. In fact, the Bank of England member has already projected to see a lesser than expected easing this year, although they anticipate three more rate cuts.
The European
Amid uncertainty in the trade tension, the EU growth remains weak with sluggish activities in the manufacturing sector and a recovering housing sector—coming together, all of these might not give the best optimism on the economic outlook yet. Inflation climbed higher further given how many unions in the EU are stimulating their growth through debt brakes or increases in government spending. and this will be projected to see further expansion, especially surrounding the US tariff restraint. In fact, the EU delayed the countermeasures on American whiskey and would negotiate only after April 2 tariffs. The market still awaits the Trump and EU retaliatory tariffs.
The United States
The Federal Reserve maintained its key rate at 4.5%, the same as its peers this week and hints at two more rate cuts this year—the dovish move approach. The Fed also wants to shrink down the balance sheet at “a slower pace” while acknowledging the recent turbulence from the tariff tensions on the weak economic outlook. These statements suggest their motive to bring stability to economic growth while looking closely at the inflation data. The forecast is revised down for GDP growth, tempered by a higher potential risk of inflation and unemployment rate and along with a rise in U.S. deficits and global tensions, all of these are likely to bring more uncertainty to the market and likely continue to pose a slowdown in economic growth. As a matter of fact, the CME FEDwatch tool suggests that the FED will hold the rate tight in May while projecting three more rate cuts this year.
