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US CPI report & Fe Chair Powell's testimony in focus

10 February 2025

Chris Scicluna; Emily Nicol
  • All eyes will be on Fed Chair Powell’s semi-annual Congressional testimony as well as the January CPI and PPI inflation data.
  • In the UK, after the BoE last week halved its economic growth forecast for this year GDP figures for Q4 and December will further highlight the flat-lining of economic activity since the spring. The week also brings speeches from MPC members including Governor Bailey and external member Mann, with the latter notably having pivoted from her previous status of uber-hawk to voting last week for a cut of 50bps

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Fed to leave policy unchanged, but ECB to cut rates by a further 25bps

27 January 2025

Chris Scicluna; Emily Nicol
  • The coming week brings monetary policy announcements from the US (Wednesday) and euro area (Thursday), as well as the first estimates of Q4 GDP from the US and euro area (Thursday) and updates on inflation from the US, Germany, France and Tokyo (Friday).
  • The Fed will leave its target range for the Fed Funds Rate unchanged at 4.25-4.50%. In his press conference, Chair Powell will again likely suggest that the risks to the US outlook are broadly in balance, but also that the FOMC remains open to renewed cuts this year. 
  • The ECB will ease policy by a further 25bps, taking the deposit rate to 2.75%. While it will insist that policy remains data-dependent and is not on a pre-set path, the Governing Council will signal the likelihood of further easing to a neutral stance over the near term. 

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BoJ set to raise rates and flash January PMIs in focus on Friday

20 January 2025

Chris Scicluna; Emily Nicol
  • In the absence of significant market turbulence following US President Trump’s inauguration, we expect the BoJ (on Friday) to raise the policy rate by 25bps to 0.50%. 
  • Japanese CPI inflation figures for December (also Friday) will highlight the case for monetary tightening, with the headline rate set to be above the BoJ’s 2% target for a 33rd successive month. 
  • The flash European composite PMIs (Friday) are expected to be broadly consistent with ongoing stagnation at the start of the year.

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December inflation reports along with China's Q4 GDP in focus

13 January 2025

Chris Scicluna; Emily Nicol

* December CPI inflation reports are due from the US and UK (Wednesday), along with final estimates of euro area HICP (Friday). 

* The ECB's account from December's Governing Council meeting (Thursday), and speeches from BoJ Deputy Governor Himino (Tuesday) and BoE MPC external member Taylor (Wednesday) will be closely watched. 

* China's Q4 GDP growth (Friday) will likely report the firmest quarterly growth in seven, with a notable boost to net trade. US and UK retail sales figures (Friday) are also due. 

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US labour market report, FOMC minutes and flash euro area inflation estimates in focus

06 January 2025

Chris Scicluna; Emily Nicol

*  The US December labour market report is expected to show non-farm payroll growth moderating to a respectable 160k after the prior month’s rebound, with the unemployment rate remaining low and stable at 4.2%, and pay growth a touch softer after two stronger months

*  In the euro area, the flash estimate of inflation in December is expected to rise for a third successive month to a five-month high around 2½%Y/Y; the increase should be principally due to energy price base effects while the main core rate could well remain steady around 2.7%Y/Y. But today's German data might provide an upside surprise 

*   Inflation will also be in focus in China, with consumer prices expected to remain negligibly higher than a year ago and producer prices still down about 2½%Y/Y; while the authorities fixed the yuan at a stronger level today to dampen depreciation speculation, expect continued attention on the Chinese currency amid uncertainty about President-elect Trump’s tariff policy.

*  In Japan, labour cash earnings growth is expected to pick up in November closer to levels consistent with the BoJ’s inflation target; the Bank’s regional economic report and information from its branch heads meeting will be watched for signals on the likely strength of settlements in the forthcoming spring pay round

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