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ECB set to cut rates by 25bps

03 June 2024

Chris Scicluna; Emily Nicol
  • The ECB will cut rates on Thursday for the first time this cycle, but President Lagarde will downplay the chances of a further cut in July and will insist that future decisions will remain data dependent. 
  • US payrolls numbers are expected to have grown close to the more moderate pace of 175k seen in April having averaged 269k in Q1
  • Figures for Japanese wages, euro area retail sales and German factory orders are also due  

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UK & Japanese inflation & flash May PMIs in focus

20 May 2024

Chris Scicluna; Emily Nicol
  • Most attention in the UK will be on April’s inflation figures, which are expected to see headline inflation take a big step down to 2.1%Y/Y principally on the back of the steep cut in the energy price cap last month
  • The flash May PMIs are expected to point to ongoing recovery momentum in the euro area and UK in the middle of Q2, but a slowdown in US economic activity
  • In the euro area, the ECB’s negotiated wage growth indicator will also be in focus and is expected to moderate only slightly in Q1 in part due to one-off payments compensating for above-target inflation

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US inflation & UK labour market in focus

13 May 2024

Chris Scicluna; Emily Nicol
  • All eyes will be on the April US CPI inflation report on Wednesday, while PPI data on Tuesday will also be closely watched.
  • UK's wage growth will be watched closely for signs of easing domestically-driven inflationary pressures.
  • In China, April figures for industrial production, retail sales and fixed investment will provide insight into recovery momentum at the start of Q2.

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BoJ to leave policy unchanged

22 April 2024

Chris Scicluna; Emily Nicol
  • The BoJ's Policy Board is highly unlikely to change policy. But with the yen uncomfortably weak for Japan’s authorities, Ueda is likely to repeat that the BoJ is prepared to tighten policy sooner rather than later if necessary to counter the cost-push impact of the exchange rate. And the BoJ’s updated economic forecasts are likely to see the near-term inflation outlook slightly revised higher

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European and Japanese inflation in focus

15 April 2024

Chris Scicluna; Emily Nicol
  • In the euro area, final March inflation estimates are likely to confirm that the headline rate matched November’s 28-month low, while core inflation declined to a two-year low
  • The UK’s dataflow will provide an important update on the key variables in the MPC’s reaction function, including the latest labour market report  and inflation figures 
  • Japanese inflation is expected to confirm that headline and core inflation remained firmly above the BoJ's 2% target.

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