OECD revises down outlook for global growth

The OECD has revised down their outlook for 2025 global GDP growth in their Interim Economic Outlook. The organization now expects global growth of 3.1% in 2025, from an initial forecast of 3.3%, while the outlook for 2026 GDP growth has been lowered to 3.0% from 3.3% in the December forecast round. There were particularly sharp reductions in the outlook for Canadian and Mexican GDP growth, as trade barriers and heightened economic uncertainty constrain demand. GDP growth in the US is expected to slow to 2.2% in 2025 and 1.6% in 2026, from 2.8% in 2024.

The headline measure of US retail sales rose modestly in February, increasing 0.2% m/m. The print was below consensus expectations for a 0.6% m/m rise but a significant improvement on the downwardly revised 1.2% m/m contraction recorded in January. The month-on-month rise was largely driven by higher spending online and on personal and medical care, while there was a notable decline in discretionary services spending. Control group retail sales – which excludes autos, food services, fuel, and building materials - and feeds into the GDP consumption measure fared better on the month, rising 1%.

President Trump, during an interview, confirmed plans to impose reciprocal tariffs as well as new sector-specific tariffs on 2 April. The president highlighted that additional tariffs would be applied to US imports of automobiles, steel and aluminium.

Today’s Economic Data and Events

• 14:00 GE ZEW survey expectations, March. Forecast: 50.3
• 17:15 US industrial production, February. Forecast: 0.2% m/m

Fixed Income

• 2yr and 10yr US treasury yields moved in opposite directions on Monday, on the back of a mixed retail sales report. Yields on the 2yr closed 3bps higher to reach 4.0441%, while the 10yr yield was 1bps lower at 4.2985%.
• European bond yields were lower across the board on the day. The 10yr Gilt yield fell 3bps to reach 4.636%, while the 10yr Bund fell by just shy of 6bps to 2.816%.

FX

• The dollar spot index fell further on Monday, closing 0.34% lower against a basket of peers. Both EURUSD and GBPUSD gained 0.4% to reach 1.0922 and 1.2992, respectively. USDJPY rose 0.38% to 149.21, ahead of the BOJ rate decision on Wednesday.
• Commodity currencies advanced against the dollar once more on Monday. AUDUSD rose 0.9% to 0.6384, NZDUSD gained 1.25% to 0.582, and USDCAD fell 0.5% to 1.4288.

Equities

• US equity markets saw a second consecutive day of gains on Monday, with control-group retail sales growth rising. The Dow Jones rose 0.85%, the S&P 500 gained 0.64%, and the NASDAQ gained 0.31%.
• European indices also rose on Monday, with resource-sector stocks faring well due to the Chinese government’s announced plans to support consumer spending. The Eurostoxx 50 gained 0.8% and the DAX increased by 0.7%. Both the FTSE 100 and CAC 40 rose around 0.6%.
• Locally, the DFM rose 0.6% while the ADX closed 0.42% higher. The Tadawul gained 0.25%.

Commodities

• Oil rose on Monday, driven by a combination of better-than-expected Chinese data and renewed geo-political tensions in the Middle East. Brent futures increased by 0.7% to USD 71.07/b, while WTI gained 0.6% to USD 67.58/b.