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MNI is the leading provider
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Thursday kicks off with the release of final inflation figures for Germany at 0700BST, followed by French inflation at 0745BST. In the US, initial jobless claims at 1330BST will again be closely watched.
German inflation up in March
German inflation rose sharply in January to 1.6% following the end of the temporary VAT cut and it remained at 1.6% in February. According to March's flash report, the annual HICP ticked up to 2.0% mainly on the back of a strong rebound of energy inflation. Markets look for an unchanged reading for the final print.
Looking ahead, inflation is likely to vary over the year due to fluctuations in oil prices last year. The composite PMI recorded the sharpest rise of prices charged for goods and services in two years. The ECB sees underlying price pressures increase in 2021 as a result of current supply constraints and a recovery of domestic demand, although price pressures are seen subdued overall. However, once the impact of the pandemic fades the ECB expects inflation to rise gradually over the medium-term.
French inflation at 1-year high
According to the flash estimate, French consumer prices increased by 1.4% in March, after rising by 0.8% in the previous month. March's increase was driven by a sharp rebound of energy inflation, rising by 4.8%. This is unsurprising given the large drop in oil prices at the same period a year ago. Moreover, service inflation increased as well in March to 1.1%, up from 0.8% seen in February. The final estimate of inflation is forecast to register in line with the flash results.
Survey evidence is in line with market forecasts. The March services PMI recorded the first increase in output prices since February 2020, while the manufacturing PMI saw the steepest rate of output charge inflation since 2011.
US jobless claims seen
U.S. initial jobless claims filed through April 10 should fall to 700,000 from 744,000 through April 3, according to Bloomberg. Continuing claims through April 3 are expected to dip to 3.7 million after falling to 3.73 million through March 27.
March payroll data indicates further improvement of the labour market. US jobs growth surged in March when employers added 916,000 jobs. Moreover, the unemployment rate eased further to 6.0%, which is the lowest level in a year.
Source: U.S. Department of Labor
The main events to look out for include speeches by Atlanta Fed's Raphael Bostic, New York Fed's Lorie Logan, San Francisco Fed's Mary Daly and Cleveland Fed's Loretta Mesta.
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.