IMF raises growth forecasts as gas prices fall and China reopens

Ross J Burland FXStreet

The International Monetary Fund projects global growth to fall from 3.4% in 2022 to 2.9% in 2023, and then rise to 3.1% in 2024. Inflation is peaking amid low growth.

Key notes

Worldwide inflation would decline to 6.6% in 2023 and 4.3% in 2024, from 8.8% in 2022, due to reduced commodity prices and rate hikes decreasing demand.

Meanwhile, we have just seen some promising numbers court of the world's second-largest economy, China:

China's Non-Manufacturing and Manufacturing PMIs have been released as follows:

Manufacturing 50.1 vs. expected 49.8 vs prior 47.
Services 54.4 vs, expect 52.0 and prior 41.6
Composite 52.9 vs. porior 42.6.

Market implications

The bulls will be cheering the sentiment, but much more will depend on this week's central bank meetings with the Federal Reserve, Bank of England and the European Central Bank deciding on interest rates followed by the governors speaking to the press. Corporate earnings are also due this week from the tech giants on Wall Street. Markets will also grapple with a host of US economic data, culminating in Friday's Nonfarm Payrolls report for January.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD accelerates losses, focus is on 1.1800

EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.

GBP/USD turns negative near 1.3540

GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold picks pace, flirts with $5,000

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and pushing higher towards the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.