IMF makes upward revision to US growth forecasts in 2025

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.