Weekly economic and financial commentary

Wells Fargo Research Team Wells Fargo

United States: Headline GDP growth overstates the strength of the economy

Real GDP expanded at a 2.9% annualized pace in Q4. While beating expectations, the underlying details were not as encouraging. Moreover, the weakening monthly indicator performances to end the year suggest the decelerating trend will continue in Q1.

International: Sentiment in Europe is improving, Bank of Canada calls it quits

For most of 2022, we had concerns that the broader European economy could be on the verge of a deep recession. While a warm winter and falling inflation have not completely abated those concerns, they do lead us to believe the European economic downturn will not be as bad as initially expected. Elsewhere, one of the major central banks opted to formally pause rate hikes this week. Following a 25 bps hike to 4.50%, Governor Macklem of the Bank of Canada declared the central bank's tightening cycle is over.

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Wells Fargo Research Team

Wells Fargo

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Editor's Picks

EUR/USD gathers recovery momentum, trades near 1.1750

Following the correction seen in the second half of the previous week, EUR/USD gathers bullish momentum and trades in positive territory near 1.1750. The US Dollar (USD) struggles to attract buyers and supports the pair as investors await Tuesday's GDP data ahead of the Christmas holiday.

GBP/USD rises toward 1.3450 on renewed USD weakness

GBP/USD turns north on Monday and avances to the 1.3450 region. The US Dollar (USD) stays on the back foot to begin the new week as investors adjust their positions before tomorrow's third-quarter growth data, helping the pair stretch higher.

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