The economic agenda ahead is expected to be a massive one, as Fed, BoE, and BoJ officials are heading for lively debates at next week’s rate decision and monetary policy meetings. In the meantime the war has pushed virus developments into the background and despite rising infection numbers in many parts of Europe, restrictions are on the way out. Volatility is likely to remain high though as Ukraine headlines remain in focus.
Tuesday – 15 March 2022
- RBA Minutes (AUD, GMT 00:30) – The RBA minutes should provide guidance as to whether the RBA members will move on inflation risks.
- Employment change & ILO rate (GBP, GMT 07:00) – UK Earnings with the bonus-included figure are expected to rise at 4.9% (3 Mo/y) from 4.3% in the three months to January. The UK ILO unemployment rate is expected to fall at 4.0% from 4.1%.
- Producer Price Index (USD, GMT 12:30) – February’s PPI is anticipated at a gain of 0.7% for the headline and 0.6% for the core, following respective gains of 1.0% and 0.8% in January. The headline and core y/y metrics are poised to climb further in March given soaring energy prices, and despite easier comparisons. The massive PPI climb since the start of 2022 has exceeded the uptrend in headline and core CPI data, and both sets of gains have chased outsized increases in the trade price measures, alongside ongoing supply constraints that have provided a powerful lift for the inflation indexes.
Wednesday – 16 March 2022
- US Retail Sales (USD, GMT 12:30) – Expectations are for a 0.4% February retail sales headline climb with a 0.8% ex-auto increase, following January increases of 3.8% and 3.3%. A continued unwind of the lift from last year’s stimulus, and restraint from the end of child tax credits in January after the earlier loss of extended jobless benefits in September, is expected.
- Consumer Price Index and Core (CAD, GMT 12:30)– Canada’s CPI surged to a 5.1% (y/y, nsa) pace in January from the 4.8% growth rate in December, and over 5% for the first time since September 1991. Figures are expected higher in February.
- Interest Rate Decision, Statement and Conference (USD, GMT 18:00-18:30) –After the CPI rose to a new 40-year high of 7.9%, odds for a more aggressive stance from the US Federal Reserve have increased. Hence the Fed appears likely to hike key interest rates at the conclusion of next week’s monetary policy meeting to prevent the economy from overheating. On top of that, last week Fed Chair Powell confirmed in his Congressional testimony that he favors a 25 bp rate liftoff in March, and that no decision on the balance sheet will be made, taking all of the drama out of the meeting. He also indicated he will do what it takes to tackle inflation, but said the Fed would be “careful” as it removed stimulus, not wishing to add any further market volatility currently.
- Gross Domestic Product (NZD, GMT 21:45) – GDP is the economy’s most important figure. The preliminary Q4 GDP for New Zealand is expected to gain to 3.2%q/q from -3.7% q/q.
Thursday – 17 March 2022
- Employment Change (AUD, GMT 00:30) – The Australian employment change is expected to show a growth to 40K employed people for February.
- ECB President Lagarde Speech (EUR, GMT 09:30)
- Interest Rate Decision, Statement and MPC Voting (GBP, GMT 12:00) – The ECB finally signalled an end to net asset purchases, while the Fed and BoE are on course to hike rates. Stagflation concerns have spiked and the BoE remains on course to hike rates again at the next meeting, despite the Ukraine war, as the bank has likely been emboldened by a stronger than expected GDP number. The trade deficit was huge and while much of the rebound at the start of the year can be attributed to virus developments, in light of subsequent developments, the numbers look already somewhat outdated. They will still add to the arguments in favour of another rate hike from the BoE next week though, as the risk that energy-driven price spikes will feed through the product chain and push up wages has greatly increased in recent months. Stagflation risks are also an issue for the UK but the BoE is clearly eager to normalise rates at least.
Friday – 18 March 2022
- Interest Rate Decision, Statement and Conference (JPY, GMT 03:00 & 06:00) –Last February, the BoJ stepped in as yields continued to rise. The BoJ announced that it would buy an unlimited amount of bonds at a fixed rate on February 14 in a bid to stop upward pressure on interest rates and re-affirm its commitment to an accommodative policy stance. The BoJ has been opting out of the general move towards policy normalisation that has become the mantra at many central banks and BoJ’s Kuroda has been adamant that for Japan there is still the need to keep easing.
- Retail Sales (CAD, GMT 13:30) – Canada’s Retail Sales are seen in contraction at -2.1% in January, with the core at -2.0% m/m from -2.5% m/m.