This week we have three G10 central banks deciding on monetary policy: The FOMC, the BoE and the RBNZ. The FOMC is widely anticipated to increase interest rates, while the other two are forecast to remain sidelined. Ahead of the BoE decision, the UK CPIs and employment data will also attract extra attention.
On Monday, we have the first meeting of the year between G20 Finance Ministers and Central Bank Governors. The meeting will be held in Buenos Aires, Argentina. Although these meetings do not tend to be market movers, this one may attract special attention, as following the latest developments over trade, the topic could gain a hot spot on the agenda.
As for the economic indicators, the only one that is worth mentioning is Eurozone’s trade balance for January.
On Tuesday, Asian time, the RBA releases the minutes from its latest policy gathering. At that meeting, the Bank kept interest rates unchanged as was expected, while it made very little changes to the statement accompanying the decision. What we found interesting was that this time around, officials noted that wage growth appears to have troughed, something that was not included in previous statements. As such, we will scan the minutes for further clues on that front.
During the European day, the main release will probably be the UK CPI data for February. Expectations are for both the headline and core rates to have ticked down, to +2.9% yoy and +2.6% yoy respectively, from +3.0% and +2.7% in January. The case for a slowdown in the UK inflation is supported by the services PMI report for the month, which revealed that cost pressures moderated to their lowest for a year and a half, contributing to a further slowdown in prices charged inflation. What’s more, the slide of the yoy change rate in Brent oil suggests that the spread between the headline and the core rates may have narrowed in February. Therefore, if the core rate was to decline, the headline rate may decline more.
Read the full financial markets weekly outlook on JFD Research.