14 March 2024
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UK economy returns to growth

By Daniel Richards

UK GDP growth was 0.2% m/m in January, in line with expectations and compared to the 0.1% contraction recorded in December. The growth was driven by construction, which rose 1.1% m/m, and services, which ticked up 0.2%, while production fell by 0.2%. Within services, retail and wholesale trade, healthcare and education all registered strong growth. The rolling 3m/3m headline measure was down 0.1%, a milder contraction than the previous 0.3% decline when the UK slipped into a technical recession with two quarters of negative growth.

A number of ECB officials are scheduled to speak today, with comments set to be parsed for any indication as to the future path of interest rates in the single currency bloc. Yesterday, Bank of France Governor Francois Villeroy de Galhau said that the first cut was more likely to fall in June than in April. This was in keeping with commentary from other officials in recent weeks.

DIFC has introduced a new set of laws which will cover digital assets, providing clarity, security and confidence for businesses and investors in the Dubai financial centre involved with the rapidly growing sector of digital finance.

Today’s Economic Data and Events

16:30 US retail sales, % m/m, February. Forecast: 0.8%

16:30 US initial jobless claims, week to March 9. Forecast: 218,000

Fixed Income

  • Yields on USTs rose across the length of the curve yesterday. The 10yr yield rose 4bps to 4.194%, while the 2yr closed up 5bps to 4.6345%.
  • US treasury secretary Janet Yellen has said that it is unlikely that interest rates will return to the low levels seen prior to the pandemic.
  • Moody’s has upgraded its outlook on UAE banks from stable to positive, citing robust economic growth and a high interest rate environment that is expected to persist until the second half of the year.


  • The US dollar closed down 0.2% against its basket of peers yesterday. Of the majors, it gained against the Swiss franc which lost 0.2% and the Japanese yen which lost 0.1%.
  • GBP was broadly flat, closing up by less than 0.1% to 1.2797, while EUR added 0.2% to 1.0948.


  • Asian equities were on the back foot yesterday, with losses in all the major indices. The Hang Seng closed down 0.1%, while the Nikkei dropped 0.3%.
  • In the US, the Dow Jones added 0.1% but both the S&P 500 (down 0.2%) and the NASDAQ (down 0.5%) lost ground. The story was mostly positive in Europe, where the STOXX 600 closed 0.2% higher.
  • Locally, the DFM closed down 0.1% while the ADX closed up by the same degree.


  • Oil prices gained yesterday, boosted by the release of the API report which showed than crude stockpiles declined by 5.5mn bbl last week. Brent futures added 2.6% to close at USD 84.0.b, while WTI added 2.8% to close at 79.7/b.

Written By

Daniel Richards Senior Economist

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