Welcome to the Q4 2023 edition of our Macroeconomic Digest, a definitive guide for discerning traders and investors. We aim to arm you with data-driven insights and nuanced perspectives that will help you stay ahead in today’s complex and ever-shifting financial ecosystem.
The U.S. Treasury yields have seen a decrease to 4.83%, marking a two-week low. This came on the heels of a revised government borrowing projection for Q4 2023 at $776 billion, significantly down from Q3’s record high of $1.01 trillion. The cause? A robust revenue stream that outperformed expectations. Market eyes are now set on the upcoming Federal Reserve’s policy decision, as there’s a 98% statistical probability of the federal funds rate holding steady.
Europe’s financial arena presented a bag of mixed signals. On one hand, we saw the inflation rate drop to an annualized 2.9%, falling short of the 3.1% forecast. On the other, GDP growth fell flat with a contraction of -0.1% YoY, contrary to the zero growth that was anticipated. Germany’s weak retail sales performance, recording a 0.8% drop, may put additional downward pressure on the Euro.
France has reported a 0.1% expansion in its Q3 GDP growth, down from an upward revision of 0.6% in the prior quarter. While net trade made a negative contribution to GDP, domestic demand emerged as a silver lining, propelled by increased household consumption in food and energy. Fixed investment saw a rise, with government spending growing by 0.4%.
The Bank of Japan kept its cards close to the vest, maintaining a -0.1% short-term interest rate and a near-zero 10-year bond yield. But in a nuanced change, the central bank replaced its rigid 1.0% inflation cap with a more flexible “upper bound.” With revised inflation projections exceeding the 2% target for FY 2023 and 2024, Japan’s economy is likely to witness moderate recovery.
China’s October manufacturing index took a surprising hit, registering at 49.5, down from September’s 50.2 and below market expectations. The data points to a contraction in new orders and a deceleration in employment, among other negative indicators. This raises concerns over the stability of China’s recovery pace, as it indicates a fragile economic state.
From revised U.S. Treasury projections to mixed signals in the European financial landscape and surprising developments in China’s factory activities, Q4 2023 has its share of twists and turns. Keep this data at your fingertips as you navigate your financial strategies through the end of the year.
Team of Elite CurrenSea