Monthly Insights - February 2024

After displaying remarkable resilience last year, the US economy appears to be slowing at the start of 2024, in line with expectations. Nevertheless, with labour market and inflation data having come in above expectations over the past month, we expect that the Fed will remain on hold for the time being. Market expectations of rate cuts in March or May have narrowed significantly, aligning with our house view of three 25bp rate cuts from June. Meanwhile, oil markets have been buffeted by a weaker demand growth outlook on the one hand and geopolitical tensions on the other through the first two months of the year, with the net result being a struggle to find direction.

The regional GCC economies are not immune from the global slowdown, and the PMI surveys for January came in at multi-month lows, indicating a slowdown in the non-oil private sectors. However, with governments set to maintain robust spending, we expect that non-oil growth in the UAE and Saudi Arabia will remain similar to that last year.

Download Monthly Insights February 2024