Yen Enters a New Downfall

Consumer prices in Japan continue to rise steadily, but this is of little concern to the central bank – a brutal combination for the Yen, which could repeat last year’s alarming decline. Japan’s CPI rose 0.5% in January, the 15th month without a decline. The annual rate of increase also continues to grow, taking headline […]

US: Income and Spending Growth Accelerates in January

Personal income growth accelerated to 0.6% month-on-month (m/m) in January, from 0.3% m/m in December (revised up from 0.2% m/m) – but was below market expectations for growth of 1.0%m/m. Compensation of employees (+0.9% m/m) accounted for most of the growth. However, the gain was partially offset by a 1.4% m/m drop in government social […]

Sunset Market Commentary

Markets “It would be a cardinal sin to let up too soon.” ECB governing council member Nagel gave some hawkish comments on the sidelines of the G20 meeting of finance ministers. He expects the (flagged) robust rate increase in March and added that he doesn’t exclude further significant rate hikes may be needed beyond March. […]

Weekly Focus

The upbeat macro data releases continued to push markets towards pricing in tighter financial conditions. February Flash PMIs beat expectations both in the euro area and the US, with especially the services sector activity recovering faster than many had anticipated. Price indicators gave more mixed signals, as input price pressures appear to be easing while […]

Week Ahead – US ISM PMIs and Eurozone CPI Data Enter the Spotlight

Following a relatively busy week, the calendar becomes lighter next week. However, that doesn’t mean there are no important economic releases on the agenda. On the contrary, with market participants trying to figure out how many more rate hikes the US economy can withstand, they may pay extra attention to the ISM PMIs for February. […]

Could Economy Finally Allow BoJ to Plot a Course Towards Normalization?

With the market dissecting BoJ governor nominee Ueda’s appearance at the House of Representatives, next week brings a rather busy schedule that includes retail sales and the Tokyo CPI. There is growing speculation about BoJ Governor Kuroda’s actions at his last meeting in charge in two weeks’ time. However, everyone acknowledges that a monetary policy tweak needs solid […]

Week Ahead – Inflation Issues Sinking In

US Disinflation trends are struggling and now Wall Street will look to see if improving manufacturing and service activity will further fuel pricing pressures. On Monday, durable goods data for January is expected to show higher borrowing costs are hurting manufacturers. Wall Street will also get a couple of Fed regional surveys from Dallas and […]

Canadian GDP estimates to show slower Q4 but resilient January

Next week’s GDP report will likely show output up a modest 1.5% (annualized) in the final quarter of 2022—just half the average pace of the first three quarters of last year. Some positive signs remained: higher retail and food services sales are pointing to an uptick in consumer spending following a 1% decline in the […]

Weekly Economic & Financial Commentary: 50 bps at the Next FOMC Meeting?

Summary United States: Mixed Housing Data and Upside Inflation Surprise Existing home sales declined 0.7% in January, while new home sales leaped 7.2%. Real personal spending shot higher in January, and solid growth in discretionary spending suggests continued consumer resilience. The core PCE deflator surprised to the upside, which could compel the FOMC to go […]

The Weekly Bottom Line: Sticky Inflation Means Higher Rates

U.S. Highlights A second read on fourth-quarter GDP showed that the U.S. economy grew by 2.7% (q/q annualized) instead of 2.9% as reported previously. A measure of underlying domestic demand was revised down from 0.2% to an even softer 0.1%. Real consumer spending rose a solid 1.1% month-on-month (m/m) in January. Core PCE inflation came […]