Global Economic News Summary - August 12, 2024

Market Performance

Global markets have experienced considerable volatility, with major indices facing losses early last week before rebounding by the end of the week. Despite the rebound, most indices closed in the red for the second consecutive week. Sectors such as industrials and communication services saw gains, while materials and utilities were among the worst performers. Crude oil prices ended their losing streak, gaining nearly 4% over the week, while bond prices fluctuated, ultimately settling lower, which drove yields higher​ (BWFA).

Inflation and Monetary Policy

Inflation continues to be a central focus for global markets. The U.S. Consumer Price Index (CPI) report for June showed a cooling of inflation, with the headline CPI falling by 0.1% month-over-month, and core CPI rising by just 0.1%. This has led to annual inflation rates of 3.0% for headline inflation and 3.3% for core inflation. The Federal Reserve is closely monitoring these trends, and discussions about potential rate cuts in the upcoming months are ongoing​ (Interactive Brokers)​ (World Bank).

Global Growth Projections

The International Monetary Fund (IMF) maintains its global growth forecast at 3.2% for 2024, with a slight increase to 3.3% in 2025. Growth in South Asia, particularly in India, is expected to moderate, while Sub-Saharan Africa is projected to see a slight improvement in growth due to better private consumption and investment. However, global risks remain high due to geopolitical tensions, slower-than-expected growth in China, and other economic uncertainties​ (World Bank).

Key Economic Developments

The U.S. trade deficit narrowed slightly in June to $73.1 billion, while the services sector in the U.S. showed expansion, driven by a rise in new orders that encouraged additional hiring. On the global stage, the focus remains on managing inflation and navigating the complexities of geopolitical tensions, which continue to pose risks to economic stability​(BWFA).

These developments reflect a complex global economic environment, with both opportunities and challenges for investors, policymakers, and businesses.

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