29 February 2024
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US Q4 GDP growth revised slightly lower to 3.2%

Daily Outlook 29 February 2024

By Khatija Haque

US GDP growth for Q4 2023 was revised slightly lower to 3.2% in the second reading, from 3.3% previously. Personal consumption expenditure was revised higher though, from 2.8% to 3.0% q/q annualized, largely due to increased spending on services. The downward revision was due to inventories, with the overall release pointing to a still robust demand side of the economy. The core PCE deflator, the Fed’s preferred measure of inflation, rose to 2.1% q/q annualized, up from the initial estimate (and the Q3 rate) of 2.0%. January personal income, personal spending and PCE data will be released this afternoon and closely watched.

Retail sales in Japan came in higher than expected at 2.3% y/y in January, while the December reading was also revised higher to 2.3% from 2.1% previously. However, industrial production was lower than expected at -7.5% m/m in January, the biggest monthly decline since the peak of the pandemic. Factory stoppages in the auto sector were the main reason for the lower output last month. The BoJ has focused on wage growth as a key variable in their assessment of the inflation outlook but weaker industrial output, and the prospect of a third quarter of negative GDP growth, may mean any increase in policy rates is modest.

The UAE minister of economy said he expects GDP growth to reach 5% this year. The comments were made at a conference in Abu Dhabi on Wednesday. He also indicated that the non-oil sector accounts for 73% of the UAE GDP, a historic high. Official data for 2023 GDP have not yet been released.

Broad money supply growth in Saudi Arabia accelerated to 9.9% y/y in January from 7.6% y/y in December. Private sector credit growth also accelerated last month to 10.8% y/y from 10.0% at the end of 2023. Net foreign assets at the central bank rose USD 2.2bn last month to USD 419.3bn.

Today’s Economic Data and Events

11:00 TU GDP (Q4) forecast 3.5% y/y

12.55 GE unemployment change (Feb) forecast 5mn

12:55 GE unemployment rate (Feb) forecast 5.8%

17:00 GE CPI (Feb P) forecast 0.5% m/m and 2.6% y/y

17:30 US personal income (Jan) forecast 0.4% m/m

17:30 US personal spending (Jan) forecast 0.2% m/m

17:30 US PCE deflator (Jan) forecast 0.3% m/m and 2.4% y/y

Fixed Income

US bond yields declined across the curve yesterday on the modest downward revision to US Q4 GDP. The 2y yield fell -6bp to 4.64% on Wednesday, the lowest level in a week. The 10y treasury yield declined -4bp to 4.26% while the 30y yield declined -3bp to 4.4% yesterday.

Initial pricing for the Government of Sharjah 12y USD sustainable sukuk is T+235, according to Bloomberg.


The USD index gained 0.1% on Wednesday, it’s first rise in over a week as it gained ground against all the major currencies and commodity currencies as well. NZD lost over 1% yesterday with AUD down -0.8% and CAD -0.6% weaker. In Europe, both GBP (1.2650) and EUR (1.0816) were down -0.3% against the dollar, as was JPY at 150.67.


US equities closed lower on Wednesday ahead of the PCE data release due today. The Nasdaq100 closed down more than half a percent, while S&P500 declined -0.2% and the DJIA fell -0.1%. European indices fared better with the DAX up 0.3% and the CAC40 up 0.1%.

The DFM closed 0.4% higher on Wednesday and is up 5.7% so far this year. Tadawul ASI and ADXGI both gained 0.1% yesterday while most other regional equity markets closed in the red.


US crude inventories grew for the fifth consecutive week, rising by 4.2mn barrels, according to official data from the EIA. Inventories are at the highest level since November, partly due to refinery outages in recent weeks. The data was reflected in a -0.4% decline in WTI prices to USD 78.54/b yesterday but Brent was fractionally higher in yesterday’s session, at USD 83.68/b.


Written By

Khatija Haque Head of Research & Chief Economist

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