Today’s menu includes UK GDP data and Eurozone industrial production.
In the eurozone, we have industrial production numbers for January. It would be interesting to observe how actual output performed in January. As soft indicators have improved and the global manufacturing cycle has bottomed. In addition, the ECB plans to publish its new operational architecture.
In the United Kingdom, the monthly GDP data for January are released at 8:00 CET.
Today’s focus in Sweden will be lectures on the economic situation. And current monetary policy by Riksbank deputy governors Flodén at 08:50 CET and Breman at 09:00 CET.
Economic and market news.
What happened overnight?
In the United States, as generally expected. The presidential election this year will most likely be President Joe Biden and former President Donald Trump both gained the minimum number of delegates to become their parties’ nominees in the 2020 election. Setting up a rematch. However, this was unofficially verified last week when Nikki Haley withdrew from the contest.
According to Reuters sources, the Bank of Japan is anticipated to issue numerical guidance on future bond purchases. After exiting its long-standing yield curve management policy and zero interest rates. Purchases would continue close to present levels to avoid sharp increases in yields. Furthermore, during the yearly salary talks, some of Japan’s leading corporations, including Toyota. Panasonic, and Nissan, offered the largest pay increases in decades. As a result, this could help to maintain long-term inflation pressure.
In the eurozone, we have industrial production numbers for January.
In Europe Governing Council member Pierre Wunsch (hawk) emphasized. That the ECB may need to take a risk by cutting interest rates soon, despite concerns about strong wage inflation and rising service prices.
What happened yesterday.
In the United States, the February CPI rose slightly over estimates. Headline inflation was 0.44% m/m SA (consensus +0.4%), whereas core inflation was 0.36% m/m SA. The details were also problematic for the Fed; for example, non-housing services inflation, which is the Fed’s primary target, has stayed stable since January. For more information, see Global Inflation Watch, 12 March. Furthermore, the NFIB’s February poll revealed that the small company confidence index fell to its lowest level since May, citing inflation fears.
In Germany, the final inflation print confirmed the flash release of a 2.5% y/y (0.4% m/m) increase in CPI, with core CPI at 3.4% y/y. The underlying facts show a lower inflation print than the headline figure, owing to package holidays and the VAT hike on food in restaurants.
The UK labour report for January/February was released yesterday.
Wage growth was lower than predicted across the board, with average weekly earnings excluding bonuses of 6.1% 3M/YoY. Similarly, the KPMG/REC report on UK jobs, released early Monday night, revealed ongoing wide softening in the labour market, with starting salaries rising at the slowest rate in over three years and vacancies falling swiftly. With official data continuing to suffer from low data quality, The Bank of England increasingly depends on the KPMG/REC poll as a leading indication of wage growth and labor market tightness.
On the international stage, President Biden said that the US will deliver a new USD 300 million military aid package to Ukraine, despite the fact that the USD 300 million is only a fraction of the USD 60 billion aid plan that Congress has debated over the last several months. Similarly, the EU is expected to agree on a new EUR 5 billion military aid fund later today, according to the Financial Times yesterday. Finally, a vessel carrying 200 tonnes of food for Gaza departed from Cyprus as part of a test effort to open up a new sea route for relief to Gaza.
https://voiceoftraders.com/analysis/japanese-yen-attracting-new-buyers-after-falling-weekly-low
