Macroeconomic/ geopolitical developments
- US CPI was warmer than expected in February, surging by 0.4% month-on-month and 3.2% year-over-year. The rise was driven by notable increases in gasoline and rent prices.
- US PPI experienced its most substantial increase in six months in February, reinforcing the warm CPI data. The PPI for final demand surged by 0.6% from January, doubling expectations, and 1.6% from a year ago.
- US yields surged higher following the warm inflation data. Both 30-year and 10-year bond yields saw a significant basis points increase.
- At the March Fed meeting all eyes are on projections for future monetary policy. Focus will be on the dot plot charts and given the stalled progress in curbing inflation, investors shouldn’t be surprised if they suggest only two rate cuts this year.
- The Bank of England and The Bank of Japan also have their meetings this week. The BoE will likely maintain the Bank Rate at 5.25% and echo previous communications; The BoJ may decide on the first hike in 17 years, marking the end of negative interest rates in place since 2016.
Global financial market developments
- Global equity indices retreated last week from near multi-year and record highs.
- US and European plunged lower in price to multi-week high yields.
- The US Dollar Index rallied later in the week from multi-week lows.
- Gold futures consolidated back lower from the recent surge to a new record.
- Oil futures broke higher to a new 2024 high.
Key this week
Central Bank Watch: A busy week for Central Banks highlighted by interest rate decisions from the BoJ and RBA Tuesday, the PBoC and FOMC Wednesday and the BoE Thursday.
Macro Data Watch: Lots of data to be released this week with the focus being global Flash Manufacturing, Services and Composite PMI throughout Thursday. We also see CPI data, with the EU releasing Monday, the UK inflation report (including CPI) on Wednesday and Japan’s release Friday.
| Date | Major Macro Data |
| 03/18/2024 | China Retail Sales and Industrial Production, EU CPI (MoM, YoY) |
| 03/19/2024 | BoJ and RBA Interest Rate Decisions, Statements and Press Conferences; EU and German ZEW Economic Sentiment Survey; Canada CPI (MoM, YoY) |
| 03/20/2024 | PBoC Interest Rate Decision; UK inflation report (including CPI); EU Consumer Confidence; FOMC Monetary Policy Decision, Statement, Conference and Economic Projections |
| 03/21/2024 | Australian employment report: global Flash Manufacturing, Services and Composite PMI; BoE Interest Rate Decision, Minutes and Report |
| 03/22/2024 | Japan CPI (YoY); UK and Canada Retail Sales (MoM, YoY) |
