Global markets rebounded, with volatility continuing to recede going into March, attributable to growing optimism surrounding the U.S.–China trade deal. U.S. employment growth fell sharply in February, signaling a slowdown in economic activity in the first quarter. The U.S. Q4 GDP growth beat market expectations, albeit lower than that of the previous quarter. The latest PMI and retail sales data also point to a softer outlook for the U.S. economy going into Q1 2019.
Economic prospects in the Eurozone is expected to deteriorate as manufacturing activity continues to weaken. The UK government lowered its 2019 growth forecast from 1.6 percent to 1.2 percent, amid Brexit chaos and a slowing global economy. In global commodity markets, crude oil prices edged higher going into mid-March.
In the ASEAN+3 region, China’s persistently weak manufacturing activity signals slower growth going into 2019. Japan’s domestic demand and industrial production continued to fall along with contracting exports. Despite downward pressures in recent days, regional stock markets rose by 0.9 percent between 15 February and 13 March, led by China. Regional emerging markets posted net capital inflows in February, mainly into Indonesia. Regional currencies continued to appreciate in early-March.
The Monthly Update of the ASEAN+3 Regional Economic Outlook (AREO) provides regular, short updates on regional economic developments, to supplement the annual AREO published in May each year. The Updates are published eight times a year, with the April and May editions incorporated into the annual AREO published in May, and the November and December editions into next year’s January Update (Special Edition).