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Thursday’s data schedule is packed with central bank policy decisions. The morning sees flash PMIs for March across the Eurozone and UK, followed by the US in the afternoon. UK distributive trades and US durable goods orders and weekly jobless claims will also be of interest today.
February Flash PMIs (France 0815 / Germany 0830 / Eurozone 0900 / UK 0930 / US 1345)
Today’s flash PMIs will have significant relevance in assessing shifts in both manufacturing and service sectors in the new Ukraine-war era.
The overarching themes to expect in this data will be contractions across all countries in both services and manufacturing, with the latter being more heavily hit on account of soaring energy and oil prices and worsened supply chain disruptions due to the Russian invasion and associated package of Western sanctions. The shock to sentiment is also likely to be apparent.
US PMI numbers are likely to see much softer contractions due to the lower degree of dependence.
There are notably substantial downside risks to today’s PMI data, which would bring the ECB’s still quietly optimistic growth outlook come under scrutiny.
Services: France services are projected to tick down 0.5 points to 55.0, whilst Germany is seeing a larger 2.1-point dip to 53.7. The Eurozone aggregate is projected to see a softer 1.2-point fall to 54.3. The UK services PMI is expected to see the largest dip of a substantial 2.5 points to 58.0, whilst the US is seeing a mere 0.5-point contraction to 56.0.
Manufacturing: Manufacturing is projected to see substantially larger contractions than services, with France seeing a 2.1-point contraction to 55.1, Germany expecting a 2.4 point slide to 58.4 and the Eurozone aggregate dropping 2.2 points to 56.0. The UK’s smaller manufacturing sector is projected to see a one-point softening to 57.0, whilst the more robust (or less dependent) US manufacturing PMI is projected to soften by 0.7 points to 56.6.
Today’s central bank meetings:
SNB Policy Rate (0830 GMT)
The Swiss National Bank is expected to keep its expansionary monetary policy on hold on Thursday despite inflation running slightly above its definition of price stability, and to repeat its willingness to intervene in foreign exchange markets following the franc’s recent breach of parity with the euro.
Though headline inflation was 2.2% in February, higher than the under-2% price stability definition, in December it forecast this to average only around 1.0% for the year. The pace of wage increases is also modest, leaving the SNB under less pressure to raise the policy rate and interest on sight deposits - currently set at −0.75% - than the European Central Bank, let alone the Federal Reserve or the Bank of England.
Norges Bank policy rate (0900GMT)
Norges Bank looks nearly certain to deliver its well-trailed 25-basis-point hike on Thursday following its March meeting, and could steepen its collective rate path to show four or even five rate hikes this year.
When it hiked its policy rate in December, Norway’s central bank said its next increase would most likely be in March, and its business survey released March 15 has since showed higher wage expectations and capacity shortages at their highest level since before the Global Financial crisis. This would imply that more rate increases are likely to be in store than the three previously anticipated.
South Africa Policy Rate (1410 GM
The SARB is broadly expected to raise its repo rate by 25bps this week to 4.25%, with the MPC acknowledging policy’s inability to mitigate the effects of exogenous energy shocks by accelerating the pace of tightening.
Governor Kganyago is likely to deliver hawkish inflation forecast updates due to the ongoing crisis in Ukraine, but may err on the side of caution in terms of hobbling the nascent recovery with larger hikes at this juncture. Analysts anticipate that headline CPI could rise to just shy of 7% Y/Y in March/April, but maintain an average rate of 5.7-6.2% in 2022.#
The MPC vote will be key in determining any prospect of future accelerations with some analysts seeing potential for one dissenting +50bp vote.
Mexico Policy Rate (1900 GMT)
Mexico's headline inflation for February rose to 7.28% Y/y versus an estimate of 7.23% and a prior reading of 7.07%. Perhaps more significantly, the annual core measure rose to 6.59% against a figure of 6.21% for January.
It was noted that in the latest set of minutes from the February meeting, one member had deliberated an even larger 75bps hike. Given the fact that inflation dynamics have worsened, there is potential for this consideration to gain broader traction among the committee. Thus, we would not completely rule out Deputy Governor’s Heath and/or Espinosa potentially dissenting at the March meeting and favouring a 75bps increaseOther data points of interest:
UK Distributive Trades (1100 GMT): UK distributive trade data is anticipated to highlight a slowdown on the retail front with reported sales to drop back 5 points to 21.
Durable Goods Orders / Initial Jobless Claims (1230 GMT): The preliminary February durable goods orders are projected to have contracted to -0.6% m/m from +1.6% m/m. Initial jobless claims are expected to soften to 210k from 214k for last week, which would be an 11-week low and a hint at labour markets nearing saturation.
Numerous policymaker appearances are on the schedule for today, for which links to events can be found in the calendar below.
| Date | GMT/Local | Impact | Flag | Country | Event |
| 24/03/2022 | 0745/0845 | ** |  | FR | Manufacturing Sentiment |
| 24/03/2022 | 0815/0915 | ** | | FR | IHS Markit Services PMI (p) |
| 24/03/2022 | 0815/0915 | ** | | FR | IHS Markit Manufacturing PMI (p) |
| 24/03/2022 | 0830/0930 |  | CH | SNB interest rate decision | |
| 24/03/2022 | 0830/0930 | *** | | CH | SNB policy decision |
| 24/03/2022 | 0830/0930 | ** |  | DE | IHS Markit Services PMI (p) |
| 24/03/2022 | 0830/0930 | ** | | DE | IHS Markit Manufacturing PMI (p) |
| 24/03/2022 | 0900/1000 | *** |  | NO | Norges Bank Rate Decision |
| 24/03/2022 | 0900/1000 | ** |  | EU | IHS Markit Services PMI (p) |
| 24/03/2022 | 0900/1000 | ** | | EU | IHS Markit Manufacturing PMI (p) |
| 24/03/2022 | 0900/1000 | ** | | EU | IHS Markit Composite PMI (p) |
| 24/03/2022 | 0930/0930 | *** |  | UK | IHS Markit Manufacturing PMI (flash) |
| 24/03/2022 | 0930/0930 | *** | | UK | IHS Markit Services PMI (flash) |
| 24/03/2022 | 0930/0930 | *** | | UK | IHS Markit Composite PMI (flash) |
| 24/03/2022 | 0930/1030 | | EU | ECB Elderson at IIEA Webinar | |
| 24/03/2022 | 1030/1030 | | UK | Bank of England Financial Policy Report | |
| 24/03/2022 | 1100/1100 | ** | | UK | CBI Distributive Trades |
| 24/03/2022 | - | | EU | ECB Lagarde at European Council Meeting | |
| 24/03/2022 | 1230/0830 | ** |  | US | Jobless Claims |
| 24/03/2022 | 1230/0830 | ** | | US | durable goods new orders |
| 24/03/2022 | 1230/0830 | * | | US | Current Account Balance |
| 24/03/2022 | 1230/0830 | ** | | US | WASDE Weekly Import/Export |
| 24/03/2022 | 1230/0830 | | US | Minneapolis Fed's Neel Kashkari | |
| 24/03/2022 | 1300/1300 | | UK | BOE Mann Panels Institute of International Finance event | |
| 24/03/2022 | 1300/1400 | | EU | ECB Elderson in Panel at LSE | |
| 24/03/2022 | 1345/0945 | *** | | US | IHS Markit Manufacturing Index (flash) |
| 24/03/2022 | 1345/0945 | *** | | US | IHS Markit Services Index (flash) |
| 24/03/2022 | 1350/0950 | | US | Chicago Fed's Charles Evans | |
| 24/03/2022 | 1430/1030 | ** | | US | Natural Gas Stocks |
| 24/03/2022 | 1500/1100 | | US | Atlanta Fed's Raphael Bostic | |
| 24/03/2022 | 1530/1130 | ** | | US | NY Fed Weekly Economic Index |
| 24/03/2022 | 1530/1130 | * | | US | US Bill 08 Week Treasury Auction Result |
| 24/03/2022 | 1530/1130 | ** | | US | US Bill 04 Week Treasury Auction Result |
| 24/03/2022 | 1700/1300 | ** | | US | US Treasury Auction Result for TIPS 10 Year Note |
| 24/03/2022 | 1900/1500 | *** |  | MX | Mexico Interest Rate |
| 25/03/2022 | 2330/0830 | ** |  | JP | Tokyo CPI |
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.