March 2024 Market Update from Canada Life Investment Management

World wealth watch: interest rates and consumer spending around the globe

Retail sales in Canada fell by 0.3% in January, its first decline since August 2023 suggesting tight financial conditions are weighing on Canadian households. The Federal Reserve held steady at a target range of 5.25%-5.50% at its March meeting, but signalled intentions to lower interest rates later this year. Fed officials expect three interest rate cuts this year.

After keeping its policy interest rate negative for eight straight years, the Bank of Japan elected to raise it to a target range of 0.00%-0.10%. The first rate hike in 17 years! Meanwhile, the European Central Bank outlines its policy path – their first interest rate cut is likely to take place in June.

At the National People’s Congress, China’s government announced its gross domestic product growth target of 5% this year. Despite meeting its target, China’s economy had underlying pockets of weakness, inhibiting exceeding its target by a large margin.

Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to extend its voluntary production cuts through the second quarter of 2024. Originally, scheduled to end after the first quarter, the production cuts might add to oil prices over the upcoming months.