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German IP surprised on the upside, while retail sales extended downwards trend

Emily Nicol
Chris Scicluna
  • Japan’s economy watchers survey saw the headline current conditions index rise for the first month in four
  • UK labour survey suggested a further moderation in permanent jobs growth in February, but still strong wage pressures
  • US trade numbers for January and ADP employment report due; Fed Chair Powell to repeat his hawkish monetary policy testimony before the House financial services committee

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Japanese wage numbers disappointed

Emily Nicol
Chris Scicluna
  • RBA hikes by another 25bps as expected, taking its Cash Rate to 3.6% and stated that it “expects that further tightening of monetary policy will be needed”
  • German factory orders rise for 2nd month in January on aerospace demand
  • Despite the headline figures signalling a rebound in spending in January, the BRC survey suggests that the downtrend in UK real sales on non-essentials continues
  • All eyes today on the Fed Chair Powell’s testimony to Congress

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The main event will be Friday's BoJ meeting

Emily Nicol
Chris Scicluna
  • Kuroda is likely to leave policy unchanged at his final meeting to try to maintain the squeeze on investors betting against YCC
  • Fed Chair Powell’s semi-annual testimony to Congress will be closely watched for any hints on the likely policy path over coming FOMC
  • ECB consumer expectations survey published this week
  • The main UK release will be January GDP data, which are expected to report only very modest growth

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Tokyo inflation took a significant step down

Chris Scicluna
Emily Nicol
  • Germany’s goods trade surplus rose to a near 2-year high; French manufacturing output started 2023 on the back foot 
  • ECB Governing Council hawk Wunsch flagged the possibility that the deposit rate might have to rise to 4.0%
  • February services PMIs from the euro area and UK this morning are expected to reaffirm the signal of a notable rebound in activity in the sector in the middle of Q1.

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UK shop price inflation jumped to a series high

Emily Nicol
  • CPI estimates from Germany’s largest state NRW surprised on the upside, suggesting that German inflation is at greater risk of an unwelcome increase in February
  • Nationwide reported that UK house prices fell for the sixth consecutive month
  • Chinese PMIs came in well ahead of expectations in February

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