Apr 1, 2024 | Insights

Macro Developments

US Recovery: Modest Improvements Amidst Economic Indicators and Political Developments

After a dismal January, February saw a modest improvement in both retail sales and industrial
production. For the first time since 2022, the ISM manufacturing index showed growth. Even
though it is still at historically low levels, the jobless rate increased in February. Globally,
estimates for the U.S. GDP in the 1Q were 3% YoY, which was higher than the norm. The
services sector was the only factor driving the 3.2% YoY increase in total inflation in the
United States, while core inflation continued to fall and reached 3.8%. For the fifth
consecutive meeting, the FED maintained its interest rate goal range of 5.25%–5.50%. In
addition, they reiterated its three rate cuts for 2024 in its updated interest rate predictions.
In the political arena, it has been confirmed that Biden and Trump will run for president once
more on November 5th, following the end of the major primary procedures in the US. During
his State of the Union speech, Biden declared that if re-elected, he would impose more taxes
on corporations and a tax on billionaires.

Europe’s Economic Divergence: Mixed Signals and Monetary Moves

The slowing of economic activity continued in Europe. March saw a continuation of the
divergence between the eurozone’s manufacturing and services PMI indexes. Regarding the
former, the numbers were very low. Conversely, the UK’s numbers were somewhat better,
with the GDP growing marginally in January and the composite PMI staying in expansionary zone
during the 1Q. Europe’s inflation rates kept going down as the labor market held steady. The
ECB maintained its deposit rate at 4%, while the BoE maintained its reference rate at 5.25%.
Lagarde hinted that the easing cycle would start in June. Unexpectedly, interest rates were
lowered by 25 basis points, to 1.50%, by the Swiss National Bank, the first central bank in a
developed market to do so.

Asia’s Economic Rebound: Signs of Recovery Amidst Regional Challenges

Increased 4Q GDP numbers signaled the correction of Japan’s technical recession, while the
Tankan manufacturing survey pointed to a strong 1Q. The Bank of Japan reversed eight years
of zero interest rates in the face of mounting evidence of robust wage growth. Despite the
ongoing downturn in the country’s real estate market, China’s contrasting early-year numbers
were solid, and the country’s total inflation rate was positive because to high demand during
the Lunar New Year period. China announced a five percent GDP growth target for 2024 at the
National People’s Congress.

Market Impact

Stock indexes kept rising, as worldwide markets enjoyed their longest positive monthly run since
2021. Due to the rise in commodity prices, the best-performing industries were energy and
materials. Oil prices increased by about 5% to $87 per barrel. In fixed income, the rates on
longer-term government bonds declined, and at the end of the quarter, the majority of
sovereign bond yields were still low. Except for the Swiss franc, which kept falling after the Swiss
National Bank imposed easing measures, the currency markets were mostly unchanged overall.
Both Bitcoin and gold hit record highs, with the former rising beyond $2,200 and the latter
momentarily reaching $70,000.

Our Expectations

Our base assumption for 2024 still involves an economic soft landing. We believe central banks
will proceed with rate decreases by the end of the 2Q as a result of the ongoing decline in
inflation. Key elections are scheduled in more than half of the world in the upcoming months,
which might lead to an increase in political and policy concerns.

This Economic Outlook report was prepared by the N PrimePartners Capital
Investment team.


The information contained herein is provided without any undertaking, representation or
warranty or other assurance, expressed or implied, with respect to their completeness,
correctness, accuracy, or fairness, or with respect to their accuracy or correctness as of any
time subsequent to the date hereof. This document may be supplemented, updated,
revised, and amended from time to time. Neither this document nor any of the
accompanying materials shall in any way constitute an offer to sell or the solicitation of an
offer to buy any shares or interest in any jurisdiction to any person to whom it is unlawful
to make the offer or solicitation in such jurisdictions or be regarded as an advertisement
that is published in connection with an offer or invitation in respect of shares or interest in
Singapore or in any other jurisdiction except where permitted by law.

Nothing in this document or any of the accompanying materials or the fact of its distribution
shall form the basis of, or be relied on in connection with, or act as any inducement to enter
into any contract or commitment thereof, or as a promise or representation as to the
investments, policies, and/or future performance of any of the products .The contents of
this document are not to be constructed as a recommendation or advice in relation to a
potential investment in any of the products or in relation to any other legal, taxation or
investment matters.

This document is intended solely for the person to whom it has been delivered and shall be
held on a strictly private and confidential basis and should not be circulated, distributed,
published or reproduced (in whole or in part) or disclosed by recipients to any other person
without the prior written consent from N PrimePartners Capital Pte Ltd. The distribution of
this document and the offering and sale of shares or interest in certain jurisdictions may be
restricted by law and therefore persons into whose possession this document comes should
inform themselves about and observe any such restrictions. Any failure to comply with these
restrictions could result in a violation of the laws of such jurisdiction.