Macroeconomic/ geopolitical developments
- Friday saw the release of the US core (less food and energy) Personal Consumption Expenditures (PCE) which was up 0.6% in January, above consensus of 0.4% rise, plus the biggest increase since August 2022. In addition, December’s figure was also revised higher, which put the YoY increase, the Fed’s preferred inflation measure, up to 4.7%, the first pickup since September 2022.
- The University of Michigan’s consumer expectations for February was revised higher to its highest level in over a year.
- Interest rate and bond markets reacted to the data pushing to higher interest rate expectations for Fed and to higher yields across the U.S. Treasury curve.
- The German Gross Domestic Product (GDP) data saw a decline of 0.4% compared with the previous three months, below the estimate of a 0.2% contraction, raising fears of a recession.
Global financial market developments
- The major US stock averages plunged last week, whilst European indices saw notable losses too, extending the losses from early February.
- US and European Bond yields were notably higher yet again last week.
- The US Dollar Index stayed solid last week, extending gains since the strong early February rebound from a multi-month low.
- Gold stayed negative to reinforce the early February plunge from a multi-month high.
- Oil posted a negative consolidation.
- Copper plunged lower, for a still negative tone.
Key this week
- Central Bank Watch: No central bank activity of note.
- Macroeconomic data: Wednesday and Friday are the notable releases with the global S&P Global and the US ISM Purchasing Managers Index (PMI) Manufacturing and Services data. We also get German (Wednesday) and EU (Thursday) Unemployment and CPI.
| Date | Key Macroeconomic Events |
| 27/02/23 | US Durable Goods |
| 28/02/23 | Australian Retail Sales; Canada GDP; US Consumer Confidence |
| 01/03/23 | Australian GDP; global S&P Global Manufacturing PMI; German Unemployment and CPI; US ISM Manufacturing PMI |
| 02/03/23 | EU Unemployment and CPI |
| 03/03/23 | Global S&P Global Services and Composite PMI; US ISM Services PMI |
