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The Week(s) Ahead - 23 December 2024 - 3 January 2025
These are the Key Macro Events for the upcoming week.
Fed Watch – A hawkish cut, with sharp talons
The Fed cut policy rates by 25 bps in another non-unanimous decision, with Hammack dissenting in favour of no cut. The cut was contrasted by a significant tightening in the dot plot, which showed a median 50 basis points of easing in 2025, compared to 100 basis points of easing in 2025 in the September dot plot. This outlook is consistent with an upward revision in the Summary of Economic Projections, with the PCE inflation forecast for 2025 rising to 2.5 from 2.1 in September. In a remarkable change of message, Powell noted that some of the projections did make assumptions on future fiscal policy. However, others did not, and some did not disclose, which is explains both the uptick in the level and the uncertainty in the inflation forecast.
FOMC Preview – Easing between a rock and a hard place
We expect a 25 bps rate cut with no major surprises from the Fed this Wednesday. Since the start of easing, inflation has picked up, and the labour market remains a mixed bag. This puts the Fed in a difficult position, though the likely response is to keep moving towards neutral.
Eurozone - PMIs stabilise on services despite political uncertainty
Euro Macro - The eurozone composite PMI for December edged up, remaining in contractionary territory but moving closer to neutral at 49.5 (48.3 in November). ECB - Dovish comments signal easing path going forward.
China: Retail sales slow in November, more support announced
China Macro: November retail sales disappoint, housing market data improve somewhat. Last week, Beijing once more confirmed it will step up stimulus in 2025. Supporting domestic demand key policy goal for 2025. Policy statements broadly in line with our views laid out in 2025 China Outlook
The Week Ahead - 16 - 20 December 2024
These are the Key Macro Events for the upcoming week.
ECB signals it is on the road to normal
The ECB cut its key policy rates by 25bp, taking the deposit rate to 3%. The move was widely expected and priced in by financial markets. The communication around the rate cut suggests that the Governing Council is comfortable with the idea of bringing policy rates back to neutral levels, if its outlook continues to be confirmed.
ESG Economist - New NGFS scenarios: more damage, less time
In November, the Network for Greening Financial Services (NGFS) published the fifth vintage of its climate scenarios. The new NGFS scenarios have been updated taking into account the most recent developments and the country-level commitments as they stood in March 2024. A new damage function has been applied incorporating the most recent insights into physical risk damages.
Economic Outlook 2025 - Webinar - The year of the tariff
Video of ABN AMRO's Group Economics webinar on the economic outlook for 2025.
ESG Strategist - Higher climate risks do not yet translate into steeper credit curves
In this piece, we look at all issuers included in the Bloomberg euro corporate bond index (excl. financials) and assess whether companies more vulnerable to climate-related risks – physical or transition - also experience steeper credit curves