The UK economy enters a recession in the fourth quarter

The UK economy enters a recession in the fourth quarter: The UK economy contracted by 0.3% in the last quarter of 2023,
entering a technical recession for the first time since the aftermath

of the COVID-19 outbreak in the first half of 2020

 

Content

The UK economy enters a recession in the fourth quarter.

The dollar has risen since the Federal Reserve’s recent statements.

The yen stabilises with Japanese authorities’ warnings of intervention.

 

 

 

The UK economy enters a recession in the fourth quarter

The UK economy contracted by 0.3% in the last quarter of 2023, entering a technical recession
for the first time since the aftermath of the COVID-19 outbreak in the first half of 2020,
with rising inflation, record borrowing costs, and weak foreign demand. On an annual basis,

the British economy contracted by 0.2% in the fourth quarter.

 

The dollar rose after the Federal Reserve’s recent statements

The dollar index rose around 104.4 and is hovering near its highest levels in six weeks,
supported by hawkish statements from a Federal Reserve official.
On Wednesday, Federal Reserve Governor Christopher Waller said the central bank
might backtrack on cutting interest rates amid strong inflation data.

The markets see a 60% chance of a Federal Reserve interest rate cut in June,

down from about 70% last week.

Investors are now looking forward to the latest report on the U.S. personal

consumption expenditures price index on Friday,
which is the Federal Reserve’s preferred inflation measure.

 

 

The yen stabilises with Japanese authorities’ warnings of intervention

The Japanese yen stabilised near 151 yen to the dollar,

recovering somewhat after falling to its lowest level 34 years earlier this week

with Japanese authorities indicating their readiness to intervene in currency markets.
Finance Minister Shunichi Suzuki warned that “decisive steps” would be taken against excessive currency movements.
Masato Kanda, the top currency diplomat, said he “would not rule out any steps to
respond to disorderly movements in the currency market.”

The yen’s rapid decline came amid speculation that the Bank of Japan’s monetary policy
remained accommodative despite the recent shift against negative interest rates.
Bank of Japan board member Naoki Tamura recently stated that the risk of inflation sharply exceeds,
and the demand for the central bank to tighten monetary policy quickly remains low.

 

The UK economy enters a recession in the fourth quarter:

The effect of the US Federal Reserve’s tightening speech

The effect of the US Federal Reserve’s tightening speech on gold and the dollar:
Today, the markets are awaiting the monetary policy meeting in the United States of America,

and the bank will likely keep the interest rate as it is without any change, around 5.5%.
Will the decision affect gold and the dollar and how?

 

Topics

 

Australian consumer prices

CB Consumer Confidence

The US Federal Reserve’s tightening speech

 

 

 

Australian consumer prices respond to monetary tightening programme

 

During Wednesday’s trading, Australian consumer prices presented data that the Bank of Australia will see as a good range.
The Bank of Australia, which is following a monetary tightening program
and raising interest rates to bring back Australian inflation, targets the bank around 2.0%.

Annual consumer prices: presented a negative reading and declined by around 3.4%.
It is worth noting that expectations were indicating 3.7%,
while the decline came from very high levels around 4.3%.

When the quarterly core consumer prices presented a contradiction to expectations that indicated a presentation of 0.8%
and achieved a lower negative reading than the reading around 1.2%,
it declined and settled around 0.6%, which is a very negative reading.

Australian quarterly core consumer prices also provided a negative reading, settling around 0.8%.
It is worth noting that the reading that preceded them was around 1.2%, contradicting expectations that were indicating 0.9%.

All of this puts the Bank of Australia in a good position,
as Australian inflation has already responded by declining through the adopted tightening file,
which may push the bank to reduce the Australian interest rate early during the current year.

 

What did American CB Consumer Confidence provide to the markets?

 

During yesterday’s trading, we witnessed data issued by the United States of America,
which presented the American Consumer Confidence Index, which was conducted on approximately 5,000 households,
asking participants to express their opinions on the current state of the economy and what are the upcoming events that they expect.

Consumer confidence presented a positive reading, contrary to expectations that were indicating 114.2, to settle around 114.8,
thus contradicting expectations and adding more positivity, as the previous reading was around 108.0.

A succession of positive data from the United States supports the positivity of the index’s movements from the beginning of the year until now,
as it is now trading around 103.20, awaiting the most important data and monetary policy report issued by the US Federal Reserve for January.

 

 

 

The US Federal Reserve and how both gold and the dollar will be affected in light of a tightening speech

The US Federal Reserve has taken the year 2023 to fight high US inflation, bringing interest rates to the highest levels of around 5.5%.
It is noteworthy that US Federal Reserve Governor Jerome Powell gave, in the last meeting of 2023 in December,
an indication of the possibility of the US Central Bank’s victory in fighting high inflation, while hinting at the start of reduction during the current year of 2024,

Today, the markets are awaiting the monetary policy meeting in the United States of America,

and the bank will likely keep the interest rate as it is without any change, around 5.5%.

We are awaiting how the Federal Reserve viewed the data issued during the last period regarding the rise in annual American consumer prices to 3.4%,

and whether the positive labor market is putting pressure on it. On inflation again, pushing it higher,

we are all waiting to find out when it will start and how much the US Federal Reserve will reduce during the current year.

 

The effect of the US Federal Reserve’s tightening speech