US GDP revised up

US GDP growth for Q4 was revised up marginally on the third print, now sitting at 2.4% annualised q/q, up from 2.3% on the previous reading. Personal consumption was revised down to 4.0%, from 4.2% previously with an upwards revision to net exports lying behind the higher headline reading. The PCE and core PCE price indices were also nudged down, to 2.3% and 2.6% respectively from 2.4% and 2.7% previously. The outlook for the year ahead is softening, however, with the OECD and the Fed’s own Summary of Economic Projections having seen two notable downgrades to growth in the past several weeks amid mounting uncertainty for businesses and consumers amidst tariffs, while government spending will also likely fall amidst a severe efficiency drive.

Meanwhile the weekly initial jobless claims rose to 224,000 in the week to March 22, up from 225,000 the previous week but broadly in line with the predicted 225,000. Continuing claims in the week to March 15 fell to 1.856mn, from 1.881mn and beating the predicted 1.886mn.

Today’s Economic Data and Events

11:00 UK GDP Q4 final print, % y/y. Forecast: 1.4%

11:00 UK GDP Q4 final print, % q/q. Forecast: 0.1%

Fixed Income

• The softer PCE print yesterday saw yields on the short end of the curve for USTs fall yesterday as the 2yr ended the day down 3bps at 3.9899%. It was a different story at the longer end, however, as concerns around the potential inflationary impact of tariffs heightened. The 10yr added 1bps to 4.3595% while the 30yr yield closed 2bps higher at 4.7208% after rising as high as 4.7507% earlier in the session, the highest since February 20.
• Fed officials have been increasingly vocal around their inflation concerns with Susan Collins saying that it would inevitably head higher on the back of tariffs, and Tom Barkin noting the effect that political instability was having on sentiment.

FX

• The dollar weakened yesterday amid concern over the impact of autos tariffs on the economy and the lower PCE print. The DXY index ended the day 0.2% lower against its basket of peers.
• GBP was a notable gainer as it added 0.5% against the greenback to end Thursday at 1.2949 while EUR added 0.4% to 1.0801. By contrast the JPY weakened by 0.3% to 151.05, the highest level in nearly a month, amid fears that Japan would be particularly affected by autos tariffs.

Equities

• Equity markets saw further losses yesterday as tariff concerns weighed on sentiment. In the US, the S&P 500, the Dow Jones, and the NASDAQ fell 0.3%, 0.4%, and 0.5% respectively.
• Locally, the DFM added 0.1% and the ADX 0.2%. Saudi Arabia’s Tadawul gained 0.5% yesterday, contributing to a 2.3% gain over its trading week to Thursday.

Commodities

• Global oil futures rose yesterday as sanctions from the Trump administration, including the secondary tariffs set to be introduced on importers of Venezuelan oil, raised questions over supply, bolstered by a drop in US inventories.
• Brent futures logged a seventh straight day of gains as they closed up 0.3% on Thursday to USD 74.0/b while WTI rose 0.4% to USD 69.9/b.