- MON: German Ifo Survey (March).
- Tuesday: NBH Policy Announcement, US Advanced Commodity Trade Balance (Feb), US Richmond Fed (March).
- married: CNB Policy Announcement, Australian Consumer Price Index (Feb).
- Thursday: SARB Policy Announcement, Central Bank Meeting Minutes, Banxico Policy Announcement, Spanish CPI (Mar), EZ Business Climate (Mar), German Preliminary CPI (Mar), US GDP (Q4) and PCE Prices (The fourth quarter).
- Republic of Macedonia: Japan Tokyo CPI (Feb), China Official PMIs (Feb), German Retail Sales (Feb), French Preliminary Release. CPI (February), EZ Flash CPI (March), US PCE (February), Canadian GDP (January), USU Finalist (March).
Note: Previews are listed in daily order
Australian CPI (Wednesday):
February’s monthly CPI is expected to have eased slightly to 7.2% from 7.4% in January, with the expected range between 6.7-7.7%. Desks warn the metric is volatile, with last month’s release surprising the downside with a 3.6% drop in apparel and footwear. Analysts at Westpac say the February survey will include quarterly data for various sectors, such as restaurants, home services, auto services, urban transportation rates, telecommunications, and insurance, among others. Westpac’s annual forecast of 7.4% is based on an increase of 0.8% for the month.
CBRT meeting minutes (Thursday):
The Central Bank of Turkey maintained the weekly repo rate at 8.50%, as was widely expected. The bank noted stronger economic activity, but warned of recession fears in advanced economies. The CBRT said the impact of the earthquake on production, consumption, employment and the outlook is being assessed, but no permanent damage to the Turkish economy from the natural disaster is expected. The Bank emphasized that it will decisively use all tools to stabilize prices and reach its medium-term inflation target of 5%, while proposing a continuation of the transparent, predictable and data-driven decision-making framework. The decision is in line with previous guidance that the benchmark was at an “adequate” level. The desks were split on whether to pause or cut interest rates again, with six out of 18 economists expecting another easy 50 basis points for this meeting. With the election looming in May, some analysts are eyeing the April 27 meeting for the possibility of a rate cut ahead of the election.
SARB announcement (information):
The Reserve Bank is expected to raise interest rates by 25 basis points to 7.50%, according to a Reuters poll. A minority of those surveyed are looking for an unchanged resolution. Analysts will be looking forward to any comment from the central bank that suggests the cycle of rate hikes is over, given the prospects for inflation calming down the road, along with weak economic momentum. “We expect a further 25 basis points in interest rates to rise in this cycle, and the still-held wage and services inflation supports our longstanding view that tough tightening is not required amid weak economic growth,” Standard Bank said, adding that “if the growth rate The economic tax ZAR remains weaker than we anticipate, the inflationary consequences and/or risks could push the Fed higher aggressively than we currently deem necessary.”
Banxico Announcement (Thursday):
Banxico unanimously rose by 50 basis points in February, with its decision driven by underlying inflation dynamics. But the central bank has indicated that with its monetary stance realizing it is likely to rise by a smaller amount at the March meeting as it sees inflation converge towards its target by Q4 2024. Accordingly, many are eyeing a 25 basis point hike next week. Data released this week showed mid-month CPI rising 0.2% m/m, slightly below the +0.3% the Street was looking for, while headline inflation slowed to 7.1% m/y from 7.5%. Pantheon Macroeconomics notes that inflation continued to decline in the first quarter, and that helps improve the economic outlook. “The main threat to economic activity now is further Banxico policy tightening. We think any rate hike over the next few months is a mistake; we think policymakers have done enough to bring inflation back on target,” says Pantheon, and adds that “Furthermore, We cannot be sure that the threats to the global banking system are over.”
Japanese CPI in Tokyo (Friday):
Core CPI in Tokyo is expected to have eased to 3.1% from 3.3% amid stable energy prices and base effects. The release is seen as a leading indicator of the national benchmarks scheduled for two weeks later. The bureaus show that Japan’s headline consumer price index in February fell largely due to the implementation of government energy subsidies. Food prices witnessed a slight increase, with non-fresh food contributing more to this increase. The above-expected rise in “super-core” CPI (excluding fresh food and energy) was driven by higher import costs, accelerating consumer prices, and faster inflation in apparel, footwear, and medical supplies. Analysts at Pantheon Macroeconomics suggested, after the February national release, that the upcoming meeting of the Bank of Japan on April 28 (led by new governor Kazuo Ueda) is expected to maintain the easy policy settings given international banking concerns. Pantheon believes Ueda is likely to maintain that Japan’s economy requires easy monetary policy throughout the year, while exploring options to adjust yield curve control policy for sustainability.
China NBS PMI (Friday):
Manufacturing PMI for March is expected to decline to 50.5 from 52.6 in February, with no forecasts for non-manufacturing and composite measurements at the time of writing. In February, PMIs surprised markets overall to the upside, with services figures pointing to a strong pickup in consumption over the Chinese New Year holidays, driven by the economic reopening. However, ING warned that the sustainability of this recovery is uncertain, with more subdued consumer activity expected in February before a gradual increase in March. The service industry is expected to outpace manufacturing in 2023, the bureau said. For this month, ING expects a monthly decline in export orders, but an increase in domestic orders within the manufacturing PMI, which it attributes to slowing demand from overseas markets. Non-manufacturing PMI is also expected to register slower growth, reflecting that China’s economic recovery has been gradual in its pace.
EZ Flash CPI (Friday):
The headline HICP is expected to decline to 7.3% yoy in March from 8.5% in February, with the super core gauge expected to rise to 5.7% yoy from 5.6%. The previous report saw the headline rate decline slightly, while the core reading rose unexpectedly, which analysts attributed to unfavorable fundamental effects. For the upcoming release, Credit Agricole expects a solid drop in headline inflation to 6.8% y/y, in line with huge negative energy core effects, one year after the outbreak of the Ukraine war, adding that the drop in headline inflation to 0.4% in March from 13.7 % in February would explain a 172 bps slowdown in headline inflation year on year. However, the bank cautions that it expects both core and food inflation to be more steady, with the former slowing very slightly to 5.5%. After the next release, Credit Agricole expects headline inflation to continue to fade, but it will be very bumpy due to fundamental impacts, policy measures and withdrawals. From a policy perspective, the upcoming release will be the first of two inflation reports scheduled before the European Central Bank meeting on May 4, and will therefore not have the “last” say in boosting expectations for this event. As it stands, market pricing is basically 50-50 on whether the ECB will sit idly by on rates or opt for a +25bts increase. However, it should be noted that this lot was produced during a bout of notable banking turmoil in the Eurozone, and therefore, markets will likely be more pessimistic than they would be if this phase of selling pressure eased.
US personal consumption expenditures, personal income and spending (Friday):
Core PCE is expected to have increased 0.4% m/m in February, with a corresponding cooling of +0.6% in January; The annual rate of core personal consumption expenditure is seen to ease to 4.3% yoy from 4.7%. Credit Suisse notes that “goods prices remain the main driver of lower inflation, with shelter and other services remaining stubbornly strong,” adding that “monthly headline inflation should be similar to core inflation, but the yearly measure should fall to 5.1% compared to with the previous year. Thanks to the easy base effect.” Meanwhile, US personal income is expected to have increased by -0.3%m/m in February, vs. +0.6%m/m in January; Also seen is personal spending rising 0.3% m/m, which would be cooler than +1.8% prior – January’s reading was supported by a one-off increase in Social Security payments; CS says it doesn’t expect a decline in average bounce, although in the coming months, growth is likely to slow. “Personal spending likely has plateaued – a positive result after last month’s extreme strength,” the bank wrote, “There is also likely to be some upward revision to consumer spending in January, boosting the Q1 GDP growth outlook.”
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