Global Economic News Weekly Update

Global Economic News Weekly Update

CMHC Canada Housing Starts

On February 17, the Canada Mortgage and Housing Corporation (CMHC) released data revealing a forecast of 246,419 new housing projects initiated during the reported month. This figure represented a potential increase compared to the previous forecast of 231,468. The Housing Starts Index was a barometer of activity within the Canadian housing market and its interconnected sectors, including banking and construction. A rise in housing starts suggested increased confidence among builders and potential homebuyers, indicating a positive trajectory for related industries. However, it was crucial to acknowledge that forecasts were inherently subject to change due to various factors, such as economic conditions, interest rates, and material costs. The impact of increased housing starts on the Canadian dollar (CAD) was not guaranteed, as a multitude of factors influences currency values. The next update is expected on March 17, 2025, with a stable forecast of 246.585 K.

Empire State Manufacturing Index

The Federal Reserve Bank of New York released the Empire State Manufacturing Index for February 2025, revealing a reading of 0.7, a significant rebound from the previous month's -12.6.  This figure potentially signaled a shift in economic winds, as the index, based on a survey of 200 New York manufacturers, gauges business conditions within the state. A reading above zero suggests improving conditions, and the latest data point, though marginally positive, raised questions about the manufacturing sector's state. The survey explored various aspects of manufacturing activity, and manufacturers provided forecasts for the next six months.  The NY Empire State Manufacturing Index is often viewed as a bellwether for nationwide production trends, and the recent uptick, however slight, could have been interpreted as a sign of resilience. However, it remained to be seen whether this marked a turning point or a temporary blip, and the index's volatility underscored the uncertainties in economic forecasting. The next release due on March 17, 2024, is forecasted to decline to -16.7.

UK Inflation Forecast data

On February 19, 2025, at 7:00 AM, the Office for National Statistics (ONS) released its latest forecast for the UK's Consumer Price Index (CPI) year-over-year, suggesting a 2.6% increase, a slight rise from the previous 2.5% forecast.  The CPI tracks price changes of approximately 700 consumer goods and services, reflecting evolving economic, technological, and cultural trends. The ONS gathered data from over 120,000 companies to calculate this key inflation indicator. While the forecast pointed to a potential 2.6% increase, it was crucial to acknowledge the uncertainties involved in economic predictions, as numerous factors, such as global events, energy prices, and consumer spending, could influence the actual inflation rate. Therefore, while the ONS forecast provided a valuable perspective, it was to be interpreted with caution, as inflation could have exceeded or fallen short of the projected 2.6%.

Philadelphia Fed Manufacturing Index

On February 20, 2025, the Federal Reserve Bank of Philadelphia released its latest Manufacturing Business Outlook Survey, revealing a complex picture of regional manufacturing activity. The headline index forecast of 28.1 suggested continued expansion but represented a notable drop from the previous forecast of 44.3. The Philadelphia Fed Manufacturing Index, a barometer of business conditions in the Third Federal Reserve District, polls approximately 250 manufacturers on key metrics. While a positive index value generally correlates with growth, the projected decline raised questions about the manufacturing sector's strength, potentially indicating softening demand or supply chain challenges.  The relationship between the index and the US dollar was worth considering, though the correlation was not guaranteed. While the index represented a regional snapshot, shifts in regional manufacturing activity could potentially provide early clues about broader trends. Further analysis of the survey's sub-components was crucial to assess the underlying drivers of the projected decline and its potential implications for the wider economy. The next release is on 20 March 2025, expecting a slight positive trend of 34.6.

US Existing Home Sales data

The National Association of Realtors released its Existing Home Sales report, revealing a forecast of 4.41 million units, compared to the previous forecast of 4.24 million, suggesting a potential increase in sales activity. The report, a key US real estate market indicator, tracks closed transactions of existing homes and provides insights into the housing sector's health. A rise in existing home sales could have indicated increased consumer confidence and investment, with ripple effects on related industries. While the forecast pointed to a potential upswing, actual sales figures could have varied depending on factors like interest rates, economic growth, and affordability, and the real estate market is subject to seasonal fluctuations.  An increase in sales could have led to a strengthening of the US dollar and potentially weakened the Singapore dollar, though currency movements are influenced by many factors.