In February, France displayed a stable economic outlook with business confidence matching expectations at 96. Meanwhile, the country’s manufacturing confidence surpassed predictions, registering a score of 97. However, France's production outlook indicator fell short of projections, recording -15 compared to the expected -13. On a positive note, the own-company production outlook surpassed expectations with a score of 6 against the forecasted 3.
In Mexico, the economic indicators presented a more challenging scenario. The fourth quarter GDP showed a contraction of 0.6% quarter-on-quarter, aligning with previous estimates. On a year-on-year basis, the GDP growth was revised down to 0.5% from an initial 0.6%. Moreover, the nominal GDP year-on-year did not meet expectations, falling short of the preliminary estimates of 7.0%. Looking ahead to 2024, Mexico's annual GDP growth projections were also revised downward from prior estimates of 3.2%. December's economic activity index indicated a monthly decrease of 0.7%, which was lower than the anticipated 0.4%, and an annual growth of just 0.2%, underwhelming the forecasted 0.5%.
The UK saw little change in its financial landscape, with the 10-year gilts yield remaining steady at 4.61%. The EUR/USD exchange rate continued to hover below the significant resistance level of 1.05. However, retail sales figures brought some optimism as January's retail sales excluding auto and fuel rose by 2.1% month-on-month, exceeding the expected rise of 0.9%. On a year-on-year basis, retail sales climbed by 1.2%, outpacing the anticipated increase of 0.6%.
Across the Atlantic, US natural gas futures experienced a notable surge, climbing nearly 5% to reach $4.3/MMBtu, marking the highest price since December 2022.
France's economic performance in February demonstrated resilience in certain sectors while revealing challenges in others. Business confidence remained stable at 96, meeting market expectations and reflecting a consistent outlook among businesses despite broader economic uncertainties. The manufacturing sector showed particular strength, with confidence levels surpassing expectations at 97, indicating robust activity and potential growth in this area.
Nevertheless, France's production outlook indicator signaled caution with a reading of -15, which was below the anticipated -13. This decline suggests potential headwinds in production activities that may impact future economic performance. Conversely, the own-company production outlook painted a more positive picture, registering a score of 6 against an expected 3. This indicates that individual companies maintain an optimistic view regarding their production capabilities and future prospects.
In Mexico, economic data for the fourth quarter depicted a contracting economy with a quarter-on-quarter GDP decline of 0.6%, aligning with initial estimates. However, year-on-year GDP growth was revised downward to 0.5% from an earlier projection of 0.6%. This reduction highlights persistent challenges in achieving sustained economic growth amid ongoing global uncertainties.
Additionally, Mexico's nominal GDP year-on-year fell short of preliminary estimates at 7.0%, indicating weaker-than-expected economic performance in real terms. Projections for Mexico's annual GDP growth in 2024 were also revised downward from prior estimates of 3.2%, reflecting concerns over long-term growth prospects.
The country's December economic activity index revealed further challenges, with a monthly decline of 0.7%, lower than the predicted drop of 0.4%. Meanwhile, annual growth was a meager 0.2%, trailing behind the anticipated increase of 0.5%. These figures suggest persistent economic struggles as Mexico contends with various internal and external factors affecting its growth trajectory.
In contrast, the UK's financial climate experienced minimal changes with the 10-year gilts yield holding steady at 4.61%. Nonetheless, the country's retail sector provided a glimmer of optimism as January's retail sales excluding auto and fuel rose by an impressive 2.1% month-on-month, significantly surpassing expectations of a 0.9% increase. Year-on-year retail sales also outperformed projections by rising 1.2%, compared to an anticipated growth of 0.6%.
This strong performance in retail sales indicates resilience within the UK consumer market despite broader economic challenges and uncertainties surrounding Brexit negotiations and global trade dynamics.
Moreover, the EUR/USD exchange rate remained below the key resistance level of 1.05, reflecting ongoing currency fluctuations amid shifting economic conditions across Europe and beyond.
In the United States, natural gas futures experienced a noteworthy surge as prices rose nearly 5% to reach $4.3/MMBtu—marking their highest level since December 2022. This increase can be attributed to heightened demand amid colder weather and supply constraints impacting energy markets globally.