GLOBAL MORNING BRIEFING: Turkey CB Seen On Hold

Thursday’s data schedule sees Swiss, Italian and Spanish trade balance releases in the morning. Some other noteworthy highlights for the day include the Turkish Central Bank’s interest rate decision, followed by US labour data and the US Philadelphia Fed manufacturing index. Japan will publish headline inflation figures in the night.

Turkey Interest Rate to Remain Unchanged (1100 GMT)

The Turkish benchmark rate is seen remaining at 14.00% for the one-week repo rate, continuing a pause of their counterintuitive easing cycle which began in September and induced the strong depreciation of the Lira.

Turkish President Recep Tayyip Erdogan implemented the interest-rate cutting with the purpose of lowering inflation through lower borrowing costs, an approach not supported by conventional macroeconomic theory. The move to hold rates steady in this rate decision is likely as a result of the uncertain political landscape surrounding the Ukraine-Russia boarder.

US Initial Jobless Claims Slowing (1330 GMT)

Initial jobless claims are forecasted to reduce slightly by 4k to 219k for the week ending February 12 from 223k in the week prior. This would be a continuation of the four-week downward trajectory which began the week ending January 16. This data highlights the waning effects of the Omicron variant on the labour market, following a major peak of over one million cases recorded in one day on January 18.

US Philadelphia Fed Manufacturing Index to Falter (1330 GMT)

Analysts are expecting the Philadelphia Fed Manufacturing Index to dip to 20.0 in February, following a January reading of 23.2, which saw a recovery from a 12-month low in December. The index remains relatively volatile, with last months upswing induced by recoveries across general activity, new orders and shipments.

Falling covid cases, along with evidence for easing in supply chain disruptions offer signals of a renewed upwards trend.

Japan Headline Inflation Inching Higher (2330 GMT)

Japanese national CPI will likely rise modestly in the January print, following a reading of +0.8% y/y in December which saw the fourth consecutive month of price growth. Surging fuel costs followed by food, housing and culture/recreation costs all generated upwards pressure. On the other hand, core inflation is seen dampening to +0.3% Y/Y for January, down from +0.5% Y/Y in December. Inflation remains mainly driven by rising energy costs.

On Tuesday the BOJ Governor Haruhiko Kuroda stated that CPI approaching the 2% target will be necessary before the discussion surrounding the exit of easy policy.

Key policymaker appearances on the schedule for today include the ECB’s President Lagarde, Schnabel and Lane at various events. The MNI Webcast with the ECB’s Phillip R. Lane discussing the Eurozone and ECB policy will be the key highlight, for which the registration link is in the calendar below. St. Louis Fed’s Bullard and Cleveland Fed’s Mester will be attending events in the evening.

Date	GMT/Local	Impact	Flag	Country	Event
17/02/2022	0700/0800			EU	ECB Schnabel discussion with SPD
17/02/2022	1100/0600	*		TR	Turkey Benchmark Rate
17/02/2022	-			EU	ECB Lagarde at G20 CB Governors Meeting
17/02/2022	1330/0830	**		US	Jobless Claims
17/02/2022	1330/0830	***		US	housing starts
17/02/2022	1330/0830	**		US	Philadelphia Fed Manufacturing Index
17/02/2022	1330/0830	**		US	WASDE Weekly Import/Export
17/02/2022	1400/1500			EU	ECB Lane on MNI Webcast on ECB Policy
17/02/2022	1530/1030	**		US	Natural Gas Stocks
17/02/2022	1600/1100			US	St. Louis Fed's James Bullard
17/02/2022	1630/1130	**		US	US Bill 04 Week Treasury Auction Result
17/02/2022	1630/1130	*		US	US Bill 08 Week Treasury Auction Result
17/02/2022	1800/1300	**		US	US Treasury Auction Result for TIPS 30 Year Bond
17/02/2022	2200/1700			US	Cleveland Fed's Loretta Mester
18/02/2022	2330/0830	***		JP	CPI