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U.S. pending home sales increase moderately, NAR says

Pending home sales in the U.S. rose 1.6% in February, spurred by modest inventory increases and job gains, a report on Thursday said. The National Association of Realtors (NAR) Pending Home Sales index rose 1.6% to 75.6 from a revised 74.4 the month prior. Economists expected a 1.5% increase, a Reuters poll showed. On a yearly basis, pending home sales fell 7% in February. “The high-cost regions in the Northeast and West experienced pullbacks due to affordability challenges,” said Lawrence Yun, the NAR’s chief economist. “Home prices rising faster than ...

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Why France is making a new push to reduce unemployment benefits

France’s government is looking to shorten the period people can claim unemployment benefits to strengthen incentives to work as it struggles to keep its deficit reduction plans on track. WHAT DOES THE REFORM SEEK TO DO? The government considers that previous efforts to rein in unemployment benefits did not go far enough and a new push is necessary to get more people back into jobs. Prime Minister Gabriel Attal has suggested unemployment benefits could be limited to 12 months from up to 18 months or more currently and that people ...

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Ukraine’s economy grew 5.3% in 2023, statistics service says

Ukraine’s economy grew by 5.3% in 2023 after contracting by almost a third in the first year of Russia’s full-scale invasion, the statistics service said on Thursday. The GDP figure was slightly higher than the figure of 5% given by Economy Minister Yulia Svyrydenko in January. The statistics service has not been publishing full data during the war. Thursday was the first time they had given a figure for annual gross domestic product since the invasion. It gave no details on the drivers of the growth in its one-line statement. ...

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German labour market remains resilient on the outside but shows weakening from the inside

The German labour market shows resilience. But only at first glance. In March, German unemployment decreased by 44,500, lowering the unemployment figure to 2.769 million. The seasonally adjusted unemployment rate remained unchanged for the fourth consecutive month at 5.9%. With this drop in unemployment, how could anyone not talk about the remarkable resilience of the German labour market? Well, this drop, along with the March numbers last year, represent the weakest spring revival that the German labour market has seen since the financial crisis. Compared with last year, unemployment is ...

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UK economy went into recession last year, data confirms

Britain’s economy entered a shallow recession last year, official figures confirmed on Thursday, leaving Prime Minister Rishi Sunak with a challenge to reassure voters that the economy is safe with him before an election expected later this year. Gross domestic product shrank by 0.1% in the third quarter and by 0.3% in the fourth, unchanged from preliminary estimates, the Office for National Statistics (ONS) said on Thursday. The figures will be disappointing for Sunak, who has been accused by the opposition Labour Party – far ahead in opinion polls – ...

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German consumers still in hibernation

In the less pessimistic forecasts for the German economy in 2024, private consumption plays a crucial role. On the back of assumed real wage growth (in the less pessimistic forecasts) private consumption is expected to pick up over the course of the year, pushing the entire economy out of stagnation. Unfortunately, data since the start of the year provides very little evidence of this consumption recovery really unfolding. February retail sales down for the fourth month in a row This morning’s retail sales data, as volatile and subject to regular ...

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ECB’s Panetta repeats conditions emerging for monetary easing

The risks to price stability in the euro zone are diminishing, creating the conditions for the European Central Bank to ease its monetary policy, governing council member Fabio Panetta reiterated on Thursday. Numerous ECB policymakers have flagged an interest rate cut for June, a first step in bringing down the record high rate of 4% it currently pays on bank deposits. “The ECB’s restrictive monetary policy is dampening demand and contributing, along with the decline in energy prices, to a rapid fall in inflation,” Bank of Italy governor Panetta said ...

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Fed’s Waller still sees ‘no rush’ to cut rates amid sticky inflation data

Recent disappointing inflation data affirms the case for the U.S. Federal Reserve to hold off on cutting its short-term interest rate target, Fed Governor Christopher Waller said on Wednesday, but he did not rule out trimming rates later in the year. “There is no rush to cut the policy rate” right now, Waller said in a speech at an Economic Club of New York gathering. Recent data “tells me that it is prudent to hold this rate at its current restrictive stance perhaps for longer than previously thought to help ...

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S&P affirms United States ‘AA+/A-1+’ sovereign ratings on economic resilience

Global ratings agency S&P affirmed its “AA+” long-term and “A-1+” short-term unsolicited sovereign credit ratings on the U.S. on Thursday, and kept the outlook on the long-term rating as ‘stable’. “A diversified and resilient economy with solid growth, extensive monetary policy flexibility, and benefits associated with the unique status as the issuer of the world’s leading reserve currency underpin the U.S. sovereign rating,” S&P said. It expects the Federal Reserve System, which provides the U.S. with considerable monetary policy flexibility, to navigate the challenges of lowering domestic inflation and addressing ...

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German retail sales fall unexpectedly in February

German retail sales unexpectedly fell in February, data showed on Thursday, quashing hopes that private consumption could help Europe’s largest economy to recover in the first quarter. Retail sales decreased by 1.9% compared with the previous month in real terms. Analysts polled by Reuters had predicted a 0.3% increase in February. “That was probably it for the positive growth in the first quarter. With industrial production weighing on GDP, hopes were pinned on private consumption to compensate,” VP Bank Chief Economist Thomas Gitzel said. Food retail sales fell by 1.7% ...

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China’s Growth Target Remains Challenging Amid Lingering Property Stress

It will be challenging for China to achieve its real GDP growth target for 2024 of “around 5%”, unveiled at the National People’s Congress annual legislative session, but the government is stepping up fiscal easing, cushioning the impact of lingering stress in the property market, says Fitch Ratings. Our March Global Economic Outlook projects China’s economic growth in 2024 at 4.5%, a marginal downward revision from December. We have cut our forecasts for China’s housing market, and now expect a 5%-10% fall in new home sales in 2024, amid the ...

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US economy continues to shine with help from consumers, labor market

The U.S. economy grew faster than previously estimated in the fourth quarter, boosted by strong consumer spending and business investment in nonresidential structures like factories and healthcare facilities. The report from the Commerce Department on Thursday also showed profits rising at a solid clip last quarter, driven by nonfinancial corporations. Increasing profits, together with rising worker productivity, could encourage companies to retain their employees, and extend the economic expansion. The economy has shrugged off fearmongering about a recession following 525 basis points worth of interest rate hikes from the Federal ...

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Global M&A picks up in Q1 after flurry of large deals

Mergers and acquisitions (M&A) bounced back in the first quarter after a downbeat 2023, thanks to the return of mega deals, cheering investment bankers and lawyers waiting for a pick-up. Total M&A volumes globally climbed 30% to about $755.1 billion, according to the most recent data from Dealogic. The number of transactions worth more than $10 billion jumped to 14, compared with five during the same period last year. Investment bankers said boardroom confidence for dealmaking has improved on the back of strong earnings, potential interest rate cuts this year ...

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China’s GDP target in realistic range despite challenges, ADB says

China’s growth target is in a realistic range, but there are some challenges including property risks and economic imbalances, Asian Development Bank (ADB) chief economist Albert Park said on Thursday. At the beginning of the annual parliament meeting last week, Premier Li Qiang announced a 2024 economic growth target of around 5%, and unveiled modest stimulus measures. “I think the 5% target for China is in a realistic range … but there are some challenges,” Park said. “We continue to see pretty significant negative investment growth and property prices actually ...

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Eurozone money growth and bank lending show cautious recovery

Broad money growth (M3) continues to increase year-on-year after declines in the second half of 2023. The recovery is very small for the moment, and mainly driven by net external assets contributing positively. This is caused by a fast recovery of the trade balance now that energy costs have moderated. A small contribution to the increase in money growth comes from credit to the private sector. Bank lending to households has shown small increases month-on-month again as the housing market starts to recover in quite a few eurozone markets. Bank ...

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