GLOBAL MORNING BRIEFING: UK and South Africa CPI in Focus

Wednesday’s data schedule highlights include UK and South African February inflation prints in the morning, followed by eurozone consumer confidence in the afternoon. The UK DMO’s 2022-23 Financing Remit is due for release in the afternoon following the Government's update on the fiscal position.

UK Inflation (0700 GMT)

UK inflation is projected to continue to accelerate in today’s February print, expected to reach a fresh 30-year high of +6.0% y/y (previously 5.5%) and +0.6% m/m (previously -0.1%), despite the downward pull of petrol prices. The most recent survey forecasts hint at an upside surprise of +6.1% y/y.

Retail price inflation is seen up 0.4pp at +8.2% y/y (+0.8% m/m) and producer price inflation is expected at +10.1% y/y for output and +13.9% y/y for input as producers continue to bear the brunt of high input costs.

This further acceleration of intermediate inflation underlines the persistence of current inflation, following last week’s BOE meeting which highlighted the likelihood of CPI reaching 8% y/y in Q2 and omitted an expected inflationary peak projection.

South Africa Inflation (0800 GMT)

South Africa’s February CPI reading is also due this morning, which sees softer price growth than the UK. A marginal uptick of 0.1pp to +5.8% y/y is anticipated, with monthly growth of +0.7%.

This data is ahead of the SARB meeting on Thursday, for which markets have pencilled in the third 25bp hike in this cycle to bring the benchmark rate to 4.25%. Recent hawkish pivots (including Powell’s aggressive remarks on Monday) from the Fed are likely to begin to exert influence on emerging markets including South Africa.

Eurozone Consumer Confidence (1500 GMT)

The EZ flash consumer confidence for March will likely see a substantial 4.1-point slide to -12.9. This will shed light on the impact of the Russian invasion of Ukraine on the region’s economic growth sentiment, hence significant downside risks are possible.

Today’s key policymaker schedule is busy. Appearances include BOE Governor Andrew Bailey, ECB President Christine Lagarde, Fed Chair Jerome Powell, New York Fed’s John Williams, San Francisco Fed’s Mary Daly and St. Louis Fed’s James Bullard. Where available, links to events are in the calendar below.

Date	GMT/Local	Impact	Flag	Country	Event
23/03/2022	0001/0001	*		UK	XpertHR pay deals for whole economy
23/03/2022	0700/0700	***		UK	Consumer inflation report
23/03/2022	0700/0700	***		UK	Producer Prices
23/03/2022	1100/0700	**		US	MBA Weekly Applications Index
23/03/2022	-			UK	OBR Economic and Fiscal Forecast
23/03/2022	-			UK	DMO 2022-23 Financing Remit
23/03/2022	1200/1200			UK	BOE Bailey Panels BIS Innovation Summit
23/03/2022	1200/0800			US	Fed Chair Jerome Powell
23/03/2022	1230/1230			UK	FY 2022/23 Budget statement
23/03/2022	1315/1415			EU	ECB Lagarde Speech at BIS Innovation Summit
23/03/2022	1400/1000	***		US	New Home Sales
23/03/2022	1430/1030	**		US	DOE weekly crude oil stocks
23/03/2022	1435/1035			US	New York Fed's John Williams
23/03/2022	1500/1600	**		EU	Consumer Confidence Indicator (p)
23/03/2022	1530/1530			UK	DMO Quarterly Consultation Meetings Agenda
23/03/2022	1530/1130	**		US	US Treasury Auction Result for 2 Year Floating Rate Note
23/03/2022	1530/1130	*		US	US Treasury Auction Result for Cash Management Bill
23/03/2022	1545/1145			US	San Francisco Fed's Mary Daly
23/03/2022	1700/1300	**		US	US Treasury Auction Result for 20 Year Bond
23/03/2022	1900/1500			US	St. Louis Fed's James Bullard
24/03/2022	2200/0900	***		AU	IHS Markit Flash Australia PMI