Macro outlook report – Negotiating the slopes with Gilles Moëc

Key learnings:

1. Chinese economy: Composite PMI improved to 50.9 in January, but CPI fell by 0.3% yoy in December, signaling persistent deflation. Government considers a "equity market rescue" plan amidst declining equity prices.
2. European economy: Euro area GDP stagnated in Q4, with core inflation at 3.3% yoy in January. ECB shows an "easing bias" but delays rate cuts; first cut expected by June due to disappointing January inflation print.
3. US economy: US GDP growth exceeded expectations at 3.3% in Q4, with job creation re-accelerating and close to 7% annualized wage growth. Core inflation fell below 2% in December, while services inflation remains above 3%.
4. ECB policy: Christine Lagarde hints at an "easing bias" but delays rate cuts; market expects first cut by June due to slow inflation movement.
5. Fed policy: Fed Chair Powell pushes back against aggressive rate cuts in January; first Fed rate cut also expected by June due to slow inflation movement and need for "greater confidence".