12thApril 2024
Friday
On Friday, significanteconomic updates are set to be released by Great Britain and the United States.The United Kingdom will disclose its month-on-month Gross Domestic Product(GDP) figures, while the United States is scheduled to announce its PreliminaryUniversity of Michigan (UoM) Consumer Sentiment and Preliminary UoM InflationExpectations, highlighting key insights into the economic health and consumeroutlook in both nations.
GBP - GDP m/m
The month-on-month Gross Domestic Product (GDP) measures the variation in the total value of all goods and services produced by an economy. Typically, a figure that exceeds forecasts is favorable for the currency in question. This critical economic indicator is released monthly, approximately 40 days following the conclusion of the reference month. It is widely recognized as the most comprehensive measure of economic activity, serving as the principal barometer for assessing the health of an economy, and thus holds significant importance for traders and analysts alike.
In January 2024, the monthly real gross domestic product (GDP) of the country saw a slight growth of 0.2%, rebounding from a 0.1% decrease observed in December 2023. However, when looking at the broader three-month period leading up to January 2024, the economy experienced a slight contraction of 0.1% in comparison to the preceding three months ending in October 2023. The services sector, which remained stagnant over the three-month period, played a pivotal role in the January upturn by growing 0.2%. Meanwhile, the production sector faced a downturn, with a 0.2% fall in both January and the three-month period. In contrast, the construction sector showed a robust growth of 1.1% in January, despite a 0.9% decline over the three-month span. This mixed economic performance highlights the nuanced and sector-specific recovery dynamics at play in the early part of 2024.
TL;DR
- January 2024: Economy grew by 0.2%, bouncing back from December 2023's 0.1% drop.
- Over the past three months leading up to January 2024, the economy slightly contracted by 0.1%.
- The services sector saw no change over three months but increased by 0.2% in January, aiding the rebound.
- The production sector declined by 0.2% in both January and the preceding three months.
- Construction experienced a 1.1% rise in January, despite a 0.9% fall over the three-month period.
The projected GPD m/m indicates a contraction of -0.3%, in contrast to the previous outcome which showed an expansion of 0.2%.
The next GDP m/m is scheduled for release on Friday at 6:00 AM GMT.
The last time, the BritishGDP m/m was announced on the 13th of March, 2024. You may findthe market reaction chart (GBPJPY M5) below:
USD - PrelimUoM Consumer Sentiment
The Preliminary University of Michigan Consumer Sentiment Index is a composite measure based on surveys conducted with consumers, assessing their financial confidence as a leading indicator of consumer spending—which constitutes a major portion of overall economic activity. This index is released monthly, typically around the middle of the month, and comes in two versions: Preliminary and Revised, published 14 days apart. The Preliminary release, being the first, generally has a greater impact. The index is derived from a survey of approximately 500 consumers, asking respondents to evaluate the relative state of current and future economic conditions.
In March 2024, the University of Michigan's Consumer Sentiment Index for the U.S. was revised upwards to 79.4 from an initial reading of 76.5, reaching its highest level since July 2021. This revision reflects a more positive outlook than initially reported, with the expectations sub index also adjusted to 77.4 from the preliminary 74.6, and the current conditions measure increased to 82.5 from 79.4. Despite a slight decline in sentiment to 76.5 from February's 76.9, the latest data indicates a stronger consumer confidence. Inflation expectations for the coming year were slightly adjusted downwards to 2.9% from an initial 3%, with the five-year forecast also revised to 2.8% from 2.9%. This adjustment suggests a marginally improved consumer outlook on inflation, alongside a more optimistic view on personal financial situations and future business conditions, despite a cautious stance in light of the upcoming November elections.
TL;DR
Metric
Initial March 2024 Reading
Revised March 2024 Reading
February 2024 Reading
1 Consumer Sentiment Index
76.5
79.4
76.9 (Decline to 76.5 in March)
2 Expectations Subindex
74.6
77.4
3 Current Conditions Measure
79.4
82.5
4 Inflation Expectations (1-Year)
3%
2.9%
5 Inflation Expectations (5-Year)
2.9%
2.8%
The forecast for the Prelim UoMConsumer Sentiment Index suggests a slight increase to 79.5, up from the previous figure of 79.4.
The next Prelim UoM Consumer Sentiment is scheduled for release on Friday at 2:00 PM GMT.
The last time, the US Prelim UoM Consumer Sentiment was announced on the 15th of March, 2024. You may find the market reaction chart (ERUUSD M5) below:
USD - PrelimUoM Inflation Expectations
The Preliminary University of Michigan Inflation Expectations gauge reflects consumers' projected percentage change in goods and services prices over the coming year. This indicator is released in two iterations—Preliminary and Revised—14 days apart, with the Preliminary data typically exerting greater influence due to its timeliness. Traders closely monitor this metric because anticipated inflation can lead to actual inflation, particularly as workers may seek higher wages in anticipation of rising costs. The measure is established through a survey involving approximately 500 consumers, querying their expectations on price levels 12 months ahead.
In March 2024, the United States' year-ahead inflation expectations, as reported by the University of Michigan, experienced a slight decline, settling at 2.9% down from the previous month's 3% and marginally beneath the initial estimate of 3%. Concurrently, the long-term inflation outlook over the next five years also witnessed a reduction, reaching a six-month nadir of 2.8%, a decrement from February's 2.9% and below the preliminary forecast of 2.9%. This shift in consumer expectations indicates a tempered outlook on inflationary pressures in the near and medium term.
TL;DR
Time Frame
Initial Estimate
February 2024
March 2024
Note
1 Year-Ahead
3%
3%
2.9%
Slight decline from last month
2 Next Five Years
2.9%
2.9%
2.8%
Lowest in six months
The projection for the PrelimUniversity of MichiganInflation Expectations points to a figure of 2.8%, marginally lower than the previous outcome of 2.9%.
The next Prelim UoM Inflation Expectations is scheduled for release on Friday at 2:00 PM GMT.
Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.
