On Monday 18th: Chinese Industrial Production, Retail Sales and the Unemployment Rate are all due.
On Tuesday 19th: The Bank of Japan and Reserve Bank of Australia are due to meet on Monetary Policy, the ZEW Economic Sentiment Index is due for Germany and the EU, while Canada reports its Inflation figures and US Building Permits are due.
On Wednesday 20th: UK Inflation figures are due, and the Federal Reserve will meet on Monetary Policy.
On Thursday 21st: Australian Employment data is available, along with Flash Manufacturing, Composite and Services PMIs from Japan, France, Germany, the EU, the UK and the US, the Swiss National Bank and Bank of England will meet on Monetary Policy, and Japanese Inflation figures are due.
On Friday 22nd: UK Retail Sales and the Ifo Business Climate index for Germany are due.
Weekly outlook
It's a busy week in economic news this week, with Monetary Policy Meetings forming the main theme. Interest Rates have been mostly holding steady across the major world economies, and many investors and borrowers alike are wondering which central bank will be the first to blink and deliver a drop in rates. Some countries are dealing with a resumption of increasing inflation, such as in the US, where February has just seen a rise in the headline inflation rate from 3.1% to 3.2% due to rising gas and housing costs. Of course, the situation is quite different in Japan where investors are expecting a first rate hike in April.
Monday 18th of March
China is due to publish a number of new reports today at 2:00 AM GMT. Industrial Production, Retail Sales and the Unemployment Rate are due, among others.
China's industrial output increased by 6.8% year on year in December 2023, up from 6.6% in the previous month and beyond market expectations. It was the highest increase in industrial production since February 2022. Expectations are for another bump of 4.9% for January to February. Annualised Retail sales have been climbing consecutively for over a year now, and the latest forecast has sales up around 5.3% compared to the 7.4% bump from December. Meanwhile, the Unemployment Rate is expected to remain steady at 5.1%.
Euro Area Inflation will be confirmed at 10:00 AM GMT today. According to a preliminary assessment, the consumer price inflation rate in the Euro Area fell to 2.6% year over year in February from 2.8% the month before. Despite being the lowest rate in three months, it will still sit higher than the 2% benchmark set by the ECB.
Tuesday 19th of March
The Bank of Japan is due to meet on Monetary Policy this week, with the Decision available at 3:00 AM GMT. As anticipated, the BoJ held the main short-term interest rate at -0.1% and the yield on 10-year bonds at about 0% at its January meeting. In the meanwhile, the BoJ reduced its quarterly prognosis for the CPI in FY 2024 from October's estimates of 2.8% to 2.4%, which reflected the recent drop in oil prices. Analysts expect the status quo to remain this week.
The Reserve Bank of Australia is also due to meet on Monetary Policy this week with the Decision Statement to be released at 3:30 AM GMT and Press Conference to follow an hour later. As was largely anticipated, the RBA maintained its cash rates at 4.35% at its first meeting in 2024. The board suggested that while the nation's cost of living was still high, but it was because service costs were not declining at a rapid enough rate. Analysts expect this will remain unchanged at the coming meeting.
The ZEW Economic Sentiment Index is due for both Germany and the EU today at 10:00 AM GMT. Amidst strong hopes that the ECB will cut rates soon, in February, the German Index reached its highest level in a year at +19.9, above market estimates of +17.5. A further bump to around 21 is expected for March. In February the EU Index reached a new all-time high of 25, up 2.3 points from the previous year. A further improvement up to 28 is expected for the new report for March.
Canadian Inflation figures are due to be published today at 12:30 PM GMT. In January, Canada's annual inflation rate dropped from 3.4% in the previous month to 2.9%, the lowest level since June 2023. A slight dip to around 2.7% is expected for February, while the Core rate is expected to fall from 2.4% to 2.3% year over year.
Preliminary US Building Permits are due for February today. In January, the seasonally adjusted annual rate of building permits in the US decreased by 0.3% to 1.489 million, from December's 1.493 million. A further drop to around 1.48 permits is expected when the new report is released at 12:30 PM GMT.
Wednesday 20th of March
Inflation in the UK remained constant at 4.0% in January, dipping below the market forecast of 4.2% and remaining around November's two-year low. Nonetheless, it was still higher than the 2.0% objective set by the BoE. Like the two months before it, January saw no change to the UK's annual Core Inflation Rate, which remained at 5.1%. The newest data is due to be published at 7:00 AM GMT.
The Federal Reserve is due to meet on Monetary Policy this week, with the Decision Statement due at 6:00 PM GMT and Press Conference at 6:30 PM GMT. At it’s previous meeting the benchmark interest rate remained at 5.50%. Prepared remarks from Fed Chair Powell for his semiannual Monetary Policy Report to the Congress indicated that the fed funds rate is probably at its peak for this tightening cycle and that it will probably be appropriate to start reducing policy restraint at some point this year, though only when there is greater confidence that inflation is moving sustainably towards 2%. A further hold is expected this week.
Thursday 21st of March
Australian Employment data is due to be released today from 12:30 AM GMT. The country had an increase of just 500 positions in employment in January. Meanwhile, the seasonally adjusted unemployment rate rose from 3.9% in the previous month to 4.1% in January, which was the highest level since January 2022. Expectations are for a jump of 40K new jobs and Unemployment Rate of 4% for February.
A range of Flash Manufacturing, Composite and Services PMIs are due across the day for March from countries such as Japan, France, Germany, the EU, the UK and the US. Positive signs are mostly expected across the board with many of the new results remaining at or climbing above the par level of 50, which indicates growth conditions.
The Swiss National Bank is due to meet on Monetary Policy this week, with the Decision due at 8:30 AM GMT. For the second consecutive meeting, the Swiss National Bank held its main policy rate at 1.75% in December 2023, in line with expectations, citing a small decline in inflationary pressure. Nonetheless, officials acknowledged that there is still a great deal of uncertainty. They will keep a careful eye on how inflation develops and will modify monetary policy as needed to keep inflation within a level that is compatible with price stability over the medium run. A hold on rates is expected this week again.
The Bank of England will also meet on Monetary Policy today with the Decision Statement and minutes due at 12:00 PM GMT. In keeping with market forecasts, the BoE held the main Bank Rate at a 16-year high of 5.25% for a fourth straight meeting at its first meeting of 2024. Rates are also expected to hold steady for the BoE this week.
Japanese Inflation figures are due today at 11:30 PM GMT. Japan's annual inflation rate fell to 2.2% in January from 2.6% in the previous month, marking the lowest level since March 2022. Prices are expected to rise again to around 2.9% year over year. Core prices are also forecast for a bump back to around 2.6% from 2% the previous month.
Friday 22nd of March
Following a steep decline of 3.3% in December 2023, Retail Sales volumes in the UK increased by 3.4% month over month in January, well above market estimates of a 1.5% rise. With the exception of apparel retailers, all subsectors had increases in sales, making it the biggest monthly growth in trade since April 2021. Growth of around 0.3% is expected month over month for February when the report is released at 7:00 AM GMT.
As businesses were less pessimistic about their prospects for the next few months, the Ifo Business Climate index for Germany increased marginally to 85.5 in February, staying little altered from a three-and-a-half-year low of 85.2 hit in January. The new data, due at 8:00 AM GMT, is expected to show a further slight improvement to around 86 for March.
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