(16 August 2024 – Global) The outlook for major G20 economies and monetary policy is unusually uncertain, leading to embedded volatility in economic growth, inflation and currency forecasts.
The prospects for a soft landing in the US have been boosted as official economic data revealed consumer-price inflation continuing to ease in line with expectations despite retail sales jumping sharply in July. A rate cut is potentially slated for September by the Federal Reserve but there are no guarantees as active debate is raised about how much the Fed will cut and how quickly it will proceed thereafter to implement dovish rates policy.
US corporate bond spreads, the premium over Treasuries that companies pay for debt, are starting to regain lost ground after recent strong economic data increased hopes for interest rate cuts and calmed recession fears.
As attention turns towards the US elections in November, corporates in Asia are attempting to comprehend how US-China trade relations could evolve.
A recent string of dismal indicators have dulled expectations for China’s economic performance in July, in an ominous sign for the rest of 2024 and pointing to the need for more stimulus measures beyond papering over pain points in the world’s second-largest economy.
After ending last year in a shallow recession, Britain’s economy has recovered as inflation eased and business and consumer confidence improved. Output increased 0.6 percent in Q2, after growing 0.7 percent in Q1. The Bank of England, which targets two percent inflation, cut rates this month for the first time since 2020.
“Growth across the three months was led by the service sector, where scientific research, the IT industry and legal services all did well,” Liz McKeown, the director of economic statistics at the Office for National Statistics, said in a statement about the Q2 results.