23 October 2024
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IMF makes upward revision to US growth forecasts in 2025

Daily Outlook 23 October 2024

By Jeanne Walters

The IMF have released updated projections for global growth in the latest World Economic Outlook, including a marginal downward revision to global growth in 2025, to 3.2% from 3.3% in their July forecast round. The forecast for global growth in 2024 was left unchanged at 3.2%. The IMF warned of risks to the global economy from the possible ramping up of protectionist trade policies.

Despite the relative stability at a global level, there were some significant changes to the Fund’s views at a country level. The October WEO included an upward revision to expectations for 2025 US growth, from 1.9% in the July round to 2.2%. In contrast Euro area growth expectations were revised down to 1.2% in 2025 from 1.5% in the previous round, with a 0.5 percentage point reduction in German GDP in 2025 due to persistently weaker manufacturing activity. The IMF now expect China to miss the 5% growth target set for 2024, achieving growth closer to 4.8%.

Today’s Economic Data and Events

  • 17:45 CA interest rate decision. Forecast: 3.75%
  • 18:00 EC consumer confidence index (Oct). Forecast: -12.5

Fixed Income

  • The was little movement in US treasury yields on Tuesday. The 2yr yield was broadly unchanged at 4.0324%, while the 10yr yield gained 1bps to 4.2076%.
  • Major European bond market yields ended the day higher. The yield on the 10yr Gilt rose 3bps to 4.1655%, while the yield on the 10yr Bund gained 4bps to 2.317%.

FX

  • The dollar was marginally stronger against a basket of major peer currencies, with the spot index gaining 0.06% on Tuesday. EURUSD fell 0.15% to 1.0799, while GBPUSD was flat at 1.2984. USDJPY gained a further 0.15% to 151.08.
  • Commodity currencies rose against the dollar. USDCAD fell 0.1% to 1.3818 ahead of the Bank of Canada rate decision later today, while AUDUSD gained 0.34% to 0.6682 and NZDUSD rose 0.2% to close at 0.6043.

Equities

  • Major US equity markets were relatively flat on Tuesday, despite strong earnings reports. The Dow Jones fell 0.02%, the S&P 500 declined by 0.05%, while the NASDAQ remained the outlier, gaining 0.2%.
  • European equity markets also closed marginally lower on Tuesday. The EuroStoxx 50 index fell 0.04%, the CAC 40 declined by a modest 0.01% and the DAX fell 0.2%. The FTSE 100 declined by 0.14%.
  • Locally, both the DFM and ADX fell 0.2% on Tuesday.

Commodities

  • Oil prices rose for a second consecutive day on Tuesday. Brent futures gained 2.4% to USD 76.04/b, while WTI rose 2.2% to USD 72.09/b. Prices have fallen back somewhat in early morning trade, with API figures suggesting that US stockpiles rose by 1.6m barrels last week.

Written By

Jeanne Walters Senior Economist


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