Summary
United States: Consumers Just Keep Humming
- As market participants continue to digest last week’s slightly hotter-than-expected consumer price data, activity data released this week show underlying demand was still humming along in the final stretch of 2023. Retail sales surprised to the upside and industrial production rose in December.
- Next week: GDP (Thu.), New Home Sales (Thu.), Personal Income & Spending (Fri.)
International: China’s Underwhelming Economic Performance Could Continue
- China’s Q4-2023 economic growth figures were modestly underwhelming, as GDP grew 1.0% quarter-over-quarter and 5.2% year-over-year, slightly below the consensus forecast.Weakness in consumption and the property sector have been constraining factors for China’s economy, while a shrinking working age population and rising youth unemployment are also challenges. Against this backdrop, our view remains for China’s GDP growth to be slower this year than in 2023.
- Next week: Bank of Japan Policy Announcement (Tue.), Bank of Canada Policy Rate (Wed.), European Central Bank Policy Rate (Thu.)
Interest Rate Watch: Talking Heads
- Despite it being a holiday-shortened week, five fed officials, four of whom are currently voting members of the FOMC, made public appearances. We unpack the highlights of those comments in this week’s Interest Rate Watch.
Topic of the Week: Another Punt on the FY 2024 Budget
- Lawmakers again resorted to a short-term patch to avoid a looming government shutdown this week. Congress passed a continuing resolution (CR) that pushes out the funding deadlines from January 19 to March 1 for four of the 12 annual appropriation bills, with the deadline for the remaining eight extended from February 2 to March 8.
