Building Up a 'Home-Grown' Inflation Issue?

This week RBA Head of Economic Analysis Marion Kohler gave a speech on the economic outlook. Normally an RBA speech so soon after the release of the Statement on Monetary Policy will be designed to reinforce the messages in that publication, rather than present new ones. Nonetheless, one can often find useful detail or nuance that was not in the SMP.

US Stock Markets Find a Positive Narrative to Keep the Rally Going

The S&P500 rebounded past the 5000 yesterday. This time, a mixed set of manufacturing data and a drop in US retail sales – which fell the most in almost a year – were brought forward as soothing factors regarding the dovish Federal Reserve (Fed) expectations. But if retail sales had remained strong, investors would’ve been as happy to see the US economy land soft.

Strong January UK Retail Sales Push Sterling and UK Yields Higher

Strong January UK retail sales push sterling and UK yields higher at the start of today’s trading. Retails sales rose 3.4% M/M vs 1.5% consensus. They add some more volatility to an interesting trading week with strong labour market figures, disappointing Q4 GDP and somewhat better inflation figures. We nevertheless expect EUR/GBP 0.85 support to survive.

Pound Traders Lock Gaze on UK Inflation and GDP Data

When they last met, Bank of England (BoE) policymakers decided to keep interest rates unchanged at 5.25%. However, the decision was not unanimous. Two members voted for raising interest rates by another 25bps and one favored a same-sized rate cut.

Fed's Barkin Says Rate Cuts Will Have to Eait

Fed's Barkin spoke at the Economic Club in New York City. He said it was wise for the FOMC to take its time before cutting rates, so as not to risk inflation reemerging. Barkin underlined that a very strong labour market, as well as strong demand gave the FOMC time to wait before beginning to cut rates. We believe the Fed will cut rates four times in 2024, whereas markets currently price in almost five cuts.

Diving into the CPI Numbers

The Bureau of Statistics will release the CPI revisions today, which consists of the revised month-over-month CPI figures for the past five years, incorporating some adjustments. What’s important to know is that the non-seasonally adjusted data remains unchanged, hence the year-over-year figures for the entire year will remain the same.

Will January's US CPI Inflation Be a Game Changer?

The US economy has left analysts speechless. Although the Fed has raised interest rates to the highest in four decades, the economy kept growing at a healthy pace in the last quarter of 2023 and six months after the central bank paused its tightening cycle.

Week Ahead Europe – A Big UK Data Drop, ECB Speakers and Eurozone GDP

The standout release is naturally the CPI data on Wednesday as the BoE mandate is inflation at 2% – half the level it stood at in December. Inflation is expected to fall over the coming months but a greater decline in January could help the case of cutting rates sooner. Equally, a higher number could be a massive setback and suggest progress has stalled which could see rate expectations pared back again.

Week Ahead North America – US Inflation Data Eyed, Canada Quiet

US economic data since the turn of the year has been far from ideal considering traders had priced in up to 175 basis points of rate cuts at one stage.

Weekly Economic & Financial Commentary: Central Banks Still in the Spotlight

This week, the Reserve Bank of Australia held its policy rate steady at 4.35% and offered policy guidance that was more hawkish than expected. In Japan, the underlying details of the December wage data, as well as encouraging signs surrounding the ongoing spring wage negotiations, keep the central bank on course for an April rate hike, in our view. Mexico's central bank held rates steady, but less hawkish language in its statement suggests it could cut rates in March.