Research center

Q4 2024 Macro Strategy Update

Global Macroeconomics – FED begins rate cuts in Q3 2024, paving the way for Central Banks worldwide to continue easing in Q4 2024 In the U.S. Fed cut interest rates in September and November by a total of 75 bps. This decision was driven by well-controlled inflation and weakened labor market, and the need for Fed intervention to provide support. Despite these challenges, U.S. GDP growth in Q3 remained at 2.4% YoY, primarily supported by consumer spending. Although the European Central Bank cut rates twice, totaling 50 bps, economic growth in the Eurozone remained sluggish in Q3. We believe this weak growth trend will persist in Q4, as the region continues to face negative impacts from prolonged geopolitical conflicts in the Middle East and Ukraine. PBOC implemented economic stimulus measures in September to boost growth. However, the recovery in the property market, a key component of China’s economy, remains slow. As a result, TVS Research projects that China is unlikely to achieve its 5% GDP growth target for 2024. Vietnam Macroeconomics – Export-driven growth continues to propel Vietnam’s economy Vietnam’s GDP grew by 6.8% YoY in 9M 2024, with exports (+15% YoY) serving as the primary driver, led by the FDI sector. Inflation was contained at an average of 3.8% YoY, below the government’s 4.5% target. However, the USD/VND exchange rate increased toward the end of Q3, driven by a stronger USD as U.S. economic indicators showed resilience. We expect economic growth in Q4 2024 to remain robust, supported by manufacturing and exports, particularly during the year-end shopping season in key export markets. Additionally, we anticipate easing exchange rate pressures by year-end due to (1) narrowing USD/VND interest rate differentials as the Fed continues its rate-cutting cycle and (2) increased USD supply from trade surpluses, FDI disbursements, and remittances during the final months of the year.

20241113_October Market report

20241113_October Macro report

20241011_Market report September 2024