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Attention on inflation data out of Japan and euro area

27 March 2023

Emily Nicol
  • Tokyo inflation figure for March on Friday likely to show a further modest easing in the headline CPI rate
  • Flash euro area inflation on Friday expected to report a notable drop in the headline rate due to base effects
  • UK bank lending figures midweek likely to report a further weakening trend in mortgage lending and approvals
  • US personal income and consumption figures at the end of the week expected to report only a modest increase in wages

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BoE set to raise rates by a final 25bps

23 March 2023

Emily Nicol
, 
Chris Scicluna
  • Reuters Tankan survey signals persisting divergence in conditions for Japanese manufacturers and non-manufacturers
  • Commission’s consumer confidence index likely to report only a modest improvement in sentiment amid ongoing uncertainties
  • US weekly jobless claims figures due alongside February new home sales figures and the Kansas Fed national activity indices

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All eyes on the Fed’s monetary policy decision

22 March 2023

Emily Nicol
, 
Chris Scicluna
  • UK inflation figures strengthened the case for a further rate hike, with headline inflation unexpectedly rising on the back of record monthly price increases in food, core goods and, most importantly, services
  • With financial markets having stabilised to some extent, the FOMC is now widely expected to raise rates by a further 25bps taking the FFR target range to 4.75-5.00%
  • Bundesbank President Nagel this morning suggested in an interview that the Governing Council must be ‘more stubborn’ in its fight against inflation

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Will the Fed still dare to hike rates on Wednesday?

20 March 2023

Emily Nicol
, 
Chris Scicluna
  • Given concerns about the inflation outlook, our colleagues at Daiwa America still forecast further tightening of 25bps taking the FFR range to 4.75-5.00%
  • We expect the BoE’s monetary policy decision on Thursday also to deliver an increase of 25bps taking Bank Rate to 4.25%
  • ECB policymakers’ comments this week will be scrutinised for further insights into the near-term policy path
  • Japanese February CPI inflation data (Friday) expected to report a notable easing in the headline rate on the back of government household energy support measures

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Japanese tertiary activity rebounds

17 March 2023

Emily Nicol
, 
Chris Scicluna
  • Japanese union confederation Rengo reports significant increase in wage settlements from this year’s “spring offensive”
  • ECB hawks Muller and Simkus signal their expectation that further hikes will be required.
  • BoE inflation attitudes survey should report slight easing in household inflation expectations this quarter.

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