MNI GLOBAL MORNING BRIEFING: Service PMIs Due

Thursday's key data points include Turkish inflation, followed by global PMIs, Eurozone PPI and employment and the US initial claim, factory and durable goods orders in the afternoon.

Markets will continue to closely monitor the Ukraine crisis today and associated policy reassessments and dovish shifts by central banks.

Turkish inflation (0700 GMT)

The headline inflation print for Turkey sees a new 20-year high. The consensus is expecting headline inflation to have grown by +52.50% y/y in February, up just under four points from +48.69% y/y in January. On the month a price increase of +3.75% is expected, albeit a substantial slowdown from the December high of +13.50% m/m.

The expected surge in energy prices due to the Ukraine crisis could exasperate the situation by adding to already strong price growth. Last month Turkey cut their food VAT from 8% down to 1% in an attempt to soften inflation, however the Turkish benchmark remains high at 14.00% following a pause in the economically counter-intuitive easing cycle and associated strong depreciation of the Lira.

The current geopolitical landscape implies that this inflation print is unlikely to shift policy changes.

Eurozone / UK / US Services & Composite PMIs

Across the Eurozone, improvements are anticipated in service and composite readings due this morning, the Spanish and Italian first and final prints are seen improving in February, with services moving from the high forties and implied contraction back above the break-even point to around the 52 mark.

France, Germany and the Eurozone are all expected to confirm flash estimates, which highlight an approximate four-point increase on the January slump.

The UK services PMI is seen confirming 60.8 points, the highest reading since June 2021. The US services PMI is expected to confirm a rebound to 56.7 in February, which remains a tick below the pre-omicron readings.

It is worth noting that markets will see this data as less relevant as the PMI survey period closed before repercussions of the Russian invasion.

Euro Area PPI / Unemployment (1000 GMT)

Factory-gate inflation is projected to rise to 27.1% y/y for the (somewhat stale) January print, up from 26.2% y/y in December. As such this print is unlikely to generate much market reaction, albeit recent survey estimates hinting at an upside surprise following yesterday’s HICP reaching another euro-era high at +5.8% y/y and +0.9% m/m for February.

Following Germany’s strong employment report yesterday, the Eurozone aggregate print is expected to inch down to 6.9% from 7.0% for January.

Despite the inflationary surge, ECB officials have been reluctant to publicly support policy tightening given current geopolitical tensions regarding the invasion of Ukraine.

US Factory Orders / Durable Goods Orders (1500 GMT)

Factory orders are expected to recover to 0.7% in today’s January reading, following December’s slide to -0.4%. Durable goods new orders are seen confirming the flash estimate at +1.6% m/m for January, up 0.4 points from December. Markets will pay attention to this but looking ahead to Friday labour market data highlight with nonfarm payrolls.

Tuesday’s data saw the ISM manufacturing survey highlight stronger than expected orders (led by new exports) and production whilst the price component dipped slightly. Supply shortages continue to hamper order fulfilment amidst growing demand in the US.

Today's key policymaker appearances are focused on North America, with both the Fed's Powell and New York Fed officials speaking, as well as the BOC Governor Macklem's speech and testimony.

Date	GMT/Local	Impact	Flag	Country	Event
03/03/2022	0700/0200	*		TR	Turkey CPI
03/03/2022	0730/0830	**		SE	Manufacturing PMI
03/03/2022	0730/0830	**		SE	Services PMI
03/03/2022	0730/0830	***		CH	CPI
03/03/2022	0815/0915	**		ES	IHS Markit Services PMI (f)
03/03/2022	0845/0945	**		IT	IHS Markit Services PMI (f)
03/03/2022	0850/0950	**		FR	IHS Markit Services PMI (f)
03/03/2022	0855/0955	**		DE	IHS Markit Services PMI (f)
03/03/2022	0900/1000	**		EU	IHS Markit Services PMI (f)
03/03/2022	0930/0930	**		UK	IHS Markit/CIPS Services PMI (Final)
03/03/2022	1000/1100	**		EU	Unemployment
03/03/2022	1000/1100	**		EU	PPI
03/03/2022	1330/0830	**		US	WASDE Weekly Import/Export
03/03/2022	1330/0830	**		US	Jobless Claims
03/03/2022	1330/0830	**		US	Non-Farm Productivity (f)
03/03/2022	1445/0945	***		US	IHS Markit Services Index (final)
03/03/2022	1500/1000	***		US	ISM Non-Manufacturing Index
03/03/2022	1500/1000	**		US	Factory new orders
03/03/2022	1500/1000			US	Fed Chair Pro Tempore Jerome Powell
03/03/2022	1530/1030	**		US	Natural Gas Stocks
03/03/2022	1630/1130	**		US	NY Fed Weekly Economic Index
03/03/2022	1630/1130	*		US	US Bill 08 Week Treasury Auction Result
03/03/2022	1630/1130	**		US	US Bill 04 Week Treasury Auction Result
03/03/2022	1630/1130			CA	BOC Governor Macklem speech, "Economic Progress Report"
03/03/2022	2030/1530			CA	BOC Governor Macklem testifies at House committee
03/03/2022	2130/1630			US	New York Fed's Lorie Logan
03/03/2022	2300/1800			US	New York Fed's John Williams