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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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All eyes on the ECB policy annoucement

16 March 2023

Emily Nicol
  • All eyes will be on the ECB policy announcement, where it remains to be seen whether policy-makers will follow through with its pre-committed 50bps hike
  • Japan’s trade deficit narrowed sharply in February
  • Japanese machine orders surged in January to their highest level in six months

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ECB seems likely to deliver another 50bps hike

13 March 2023

Emily Nicol
  • US and UK authorities stepped in to limit the fallout from the collapse of SVB
  • UK Government’s fiscal plans to be laid out in Wednesday’s Budget Statement
  • This week’s US CPI figures will be closely watched
  • Japanese business survey signalled a decline in conditions in the first quarter, with a notable deterioration in the manufacturing sector

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