Yesterday, the International Monetary Fund cut its outlook for global growth in 2019 to the lowest level since the financial crisis. The reasons for this change are various and include Brexit, the difficult trade talks between the US and China and the slowing global growth. Provided that a Brexit deal is done, the World Economic Outlook (WEO) has predicted a UK growth of 1.2 per cent in 2019. Growth in 2020 has also been revised down by 0.1 points to 1.4 per cent since the fund’s last WEO in October. Today, the February’s GDP report is due at 9.30am and will reveal how Britain’s economy performed during that month. The consensus is for no growth at all but some economists have various predictions, from an encouraging 0.3 per cent growth to a disappointing 0.2 per cent contraction.
Investors will also (and again) focus on Brussels, where European leaders will tonight vote on the UK’s latest Brexit extension request (a short extension). The European Council president Donald Tusk has already called on members to back a year-long delay, in order to avoid “rolling series of short extensions and emergency summits, creating new cliff-edge dates”. Both the pound and the euro will be in focus today, especially as European policymakers unveil their decision: although President Draghi suggested that the ECB would take a look into its negative interest-rate policy and its impact on banks, it appears that the central bank is in no rush to change it. Today, no changes to the current policy are expected, neither details about the TLTROs.
With little US economic data published yesterday, the US dollar traded lower against most of the major currencies but today should be an interesting day for the greenback, with CPI and FOMC minutes scheduled for release.
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