Weekly Market Analysis 19 February 2024

Last week, data flow was quite intense in global markets. Inflation, producer price index and industrial production data in the USA, and growth data in the UK and the Euro Zone were followed. The consumer price index in the USA increased by 0.3% monthly in January, above expectations. The expectation was for a monthly increase of 0.2%. Annual inflation, which was 3.4% in December, was above expectations with 3.1% in January. The expectation was that it would decrease to 2.9%. While core inflation, which does not include energy and food prices, recorded the fastest increase in 8 months with 0.4% monthly, it remained stable at 3.9% on an annual basis. The expectation was an annual increase of 3.7%. The producer price index in the USA increased by 0.9% annually and 0.3% monthly in January. There was a monthly increase of 0.6% in the producer price index excluding food, energy and trade. According to US Federal Reserve (Fed) data, while industrial production decreased by 0.1% in January compared to the previous month, it remained unchanged in December 2023 and remained below the market expectation of an increase of 0.2%. While manufacturing industry production also decreased by 0.5% in January, the market expectation was that it would remain unchanged in January. The capacity utilization rate decreased by 0.2 points to 78.5 in the same period, remaining 1.1 points below the long-term average. The UK economy entered recession in the second half of the year, contracting by 0.1% in the third quarter of 2023 and 0.3% in the fourth quarter. At the same time, the country's economy contracted by 0.2% on an annual basis in the last quarter of the year. GDP in the Eurozone economy remained unchanged in the fourth quarter of 2023 compared to the third quarter. Additionally, the annual change in GDP in the Eurozone in the last quarter of the year was 0.1%. In the preliminary data announced in January, GDP in the EU remained unchanged on a quarterly basis in the last quarter of last year, but increased by 0.2% on an annual basis. Global markets followed a mixed course throughout the week. An ounce of gold was priced above $2,000 and opened the week at $2,020.