Below are the most important global events likely to impact currency and bond markets over the next week starting March 11th.
In the US and Europe, economic data will be closely watched, including Tuesday's US inflation data, as the focus remains on when central banks will start cutting interest rates.
Data statistics are relatively light in Asia after an intense week centered on China's economic blueprint for 2024. More China data is in the works, and data from Japan and India is also expected to be released, along with comments from the Reserve Bank of Australia.
US: US inflation data for February will be released on Tuesday and will be closely watched as the current focus is on when the US Federal Reserve is likely to start cutting interest rates. . Unexpectedly high inflation in January caused the market to back off expectations for a rate cut. Investors are keeping an eye on whether this strong inflation trend will continue into February. U.S. producer price inflation data for February released on Thursday will provide an indication of inflationary pressures in the pipeline.
Future U.S. economic indicators will tell us about the health of the U.S. economy, with February retail sales and weekly unemployment claims to be released on Thursday, and February industrial production and the University of Michigan's March preliminary consumer survey released on Friday. It will be a clue. Evidence of an economic slowdown could increase expectations for a June interest rate cut in the U.S., especially after Federal Reserve Chairman Jerome Powell said in testimony to lawmakers that the central bank is on track to cut interest rates by the end of the year. There is. The Fed's next meeting is next week, March 20th.
Eurozone: The European Central Bank kept interest rates on hold at its March 7 meeting, saying any cut (which most analysts expect in June) would depend on future data. Germany's final CPI figures for February will be released on Tuesday, and Spain's inflation figures on Thursday. The euro zone's industrial production data for January is due to be released on Wednesday, and could provide evidence of whether the euro zone's sluggish economy is starting to pick up.
In the euro zone, the Netherlands, Germany, Italy and possibly Portugal will also hold bond auctions, while Switzerland, Sweden and Norway also plan to issue bonds.
UK: UK unemployment and wages figures released on Tuesday, followed by monthly GDP and industrial production figures for January on Wednesday, giving the UK economy a boost ahead of next week's Bank of England policy decision on March 21st. This will be an indicator of how they are holding up. Recent data suggests the UK economy is holding up fairly well and any signs of slowing could change expectations for a rate cut. Most commentators now expect the BoE to follow in the footsteps of the US Federal Reserve (Fed) and the European Central Bank (ECB) in cutting interest rates.
On Tuesday, the UK Debt Management Office will auction 10-year government bonds (golden bonds).
China: China's high-level policy meeting, known as the Second Session, will conclude with a speech from President Xi on March 11. No further major headlines are expected, but market attention will remain focused on further measures to support Chinese government policy. The annual growth target is approximately 5%. The general consensus is that it will be difficult for China to achieve that goal.
There was also widespread disappointment at the lack of details on how the country plans to address its economic weaknesses. More concrete measures would go a long way in reassuring investors.
“Bottoming and recovery in sentiment will be the main catalyst for a sustainable economic recovery,” said Lin Song, chief economist for Greater China at ING. “Policy developments in the coming weeks and months will play a major role in determining whether this bottoming occurs this year.”
The policy implications of data on consumer inflation and factory prices to be released over the weekend will also be in focus. Deflation is a major concern in the world's second-largest economy, with weak demand dampening key growth drivers. Any signs of reflation would be welcome.
Economists surveyed by the Wall Street Journal predict that the CPI will return to positive territory in February, at 0.3% from -0.8% in January, and that the PPI will continue to contract at -2.5%.
Money and credit statistics for February are also expected to be released this week. Arjun Varma and Hui Xiang of Goldman Sachs said: “February is typically a month when new lending declines, but policy makers' guidance to smooth out intra-year fluctuations in loan extensions may have contributed to the increase in lending in February. It may have helped.”
The central bank also lowered reserve requirement requirements for banks and directed lenders to lower key lending rates in February. “These measures should support broad-based credit growth,” GS strategists said.
Japan: Japan will announce revised growth forecasts for the final quarter of 2023 on March 11, amid growing expectations that the central bank will lift negative interest rates.
Preliminary data for February showed economic growth contracted 0.1% quarter-on-quarter in the three months to December, raising fears of a technical recession. However, the extent of the decline was small enough to leave room for doubt. Revised data could push numbers back into positive territory.
Last week, Bank of Japan board member Junko Nakagawa made comments that the economy was making steady progress toward achieving the price target, raising expectations that the lifting of negative interest rates would be announced next month.
Australia: First public comments by the Reserve Bank of Australia's new chief economist will be closely scrutinized.
Assistant Governor for Economics Sarah Hunter is in charge of the central bank's forecasts, and she will appear at a panel discussion in Sydney on Tuesday as the economy slows to its worst pace in the final months of 2023. This is the first time since data has shown that this is the case.
Still, the RBA is likely to want to stick to its recent warning that it cannot rule out further rate hikes.
Elsewhere, business and consumer confidence data for February and March showed that while household relief in the form of interest rate cuts still appears to be a long way off, the overall mood of the economy remains strong as unemployment rises. is expected to continue to decline.
India: Tuesday's consumer and wholesale price data will indicate the extent to which inflationary pressures persist in India. The country's central bank has kept interest rates unchanged due to easing inflation and economic resilience, but said it would closely monitor food prices.
Goldman Sachs strategists expect headline CPI inflation to remain unchanged this month, core inflation to decline slightly, but food price inflation to remain high.
SINGAPORE: On Wednesday, the Monetary Authority of Singapore will release the results of its quarterly survey of professional forecasters. The survey provides an overview of economists' and analysts' forecasts for Singapore's key economic indicators. In the December survey, respondents expected Singapore's GDP to expand by 2.3% in 2024, with headline inflation at 3.4% and core inflation at 3.0%.
(All references to event dates in Asia are in local time.)
–Additional reporting by James Glynn, Ronnie Harui, Memese Fujikawa and Emese Bartha
Email Jessica Fleetham (jessica.fleetham@wsj.com) and Fabiana Negrinochoa (fabiana.negrinochoa@wsj.com).
(Ended) Dow Jones News
March 10, 2024 17:14 ET (21:14 GMT)
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