MNI GLOBAL WEEK AHEAD: ECB to Hike & US CPI Due

The spotlight in the coming week across developed markets will be on the ECB rate decision and US CPI.

MONDAY

No data of note.

TUESDAY

UK Labour Report: The January/February UK labour report is likely to show some marginal easing of labour market pressures. Wage pressures are projected to cool slightly in January, slowing 0.2pp to +5.7% 3m/yoy for average earning and 0.1pp to +6.6% 3m/yoy ex bonuses.

This follows the December’s strongest wage growth rate on record barring the pandemic period. Wages will be closely watched by the BOE ahead of the March 23 meet, after suggesting that a continuation of domestic price and wage pressures growth would imply an active response in the Bank Rate.

Spain Final HICP: Following final German HICP data on Friday (unrevised), Spanish HICP looks to be confirmed at +1.0% m/m and +6.1% y/y, implying a 0.2pp acceleration on January headline y/y.

US CPI: Consensus is currently looking for a 0.4pp deceleration in US headline CPI to +6.0% y/y in February. Prices are expected to increase by +0.4% m/m, just 0.1pp below the January rate. Core CPI is projected to inch down 0.1pp to +5.5% y/y, easing for the fifth consecutive month albeit at a slow pace.

February payrolls data was a mixed, as US. employers hired significantly more workers than expected, but wage growth slowed and more workers entered the workforce. As such, a more marked upside surprise to US underlying CPI would likely be needed to increase the chance of a 50bp hike at the Fed’s March 21-22 meeting.

WEDNESDAY

Sweden CPI: Swedish inflation is expected to largely hold pace in February with headline CPI to remain at +11.7% y/y and CPIF only easing by a marginal 0.1pp to +9.2% y/y. With core CPIF expected to hold steady at an over-three decade high of +8.7% y/y, the Riksbank remains on a hawkish foot.

France Final HICP: February French HICP rose +1.0% m/m and +7.2% y/y, up 0.2pp from January.

Eurozone Industrial Production: Euro area IP could note modest January uptick, with consensus pencilling in +0.5% m/m and y/y after a contractionary end to 2023. German industrial production jumped +3.5% m/m in January, with energy-intensive production improving, bolstered by energy price caps. Meanwhile French, Spanish and Dutch data has proved contractionary, whilst Austria saw a moderate +0.5% m/m uptick.

UK Spring Budget: On Wednesday, Chancellor Hunt’ Spring Statement (shortly after 1230 GMT) will provide clarity on UK energy bill support going forward, which could have implications for the inflation path.

US PPI & Retail Sales: February retail sales are seen slowing to +0.2% m/m after +3.0% m/m in January whereby warm weather conditions boosted spending. Underlying demand conditions remain muted, with consensus looking for sales ex. auto to contract by -0.1% m/m.

Factory-gate inflation data should show a continued trend in slowing final demand PPI, with consensus looking for +0.3% m/m after +0.7% m/m in January. Despite m/m PPI remaining expansive, PMI evidence has cited cooling demand and easing supply chains are filtering into lower input costs faced by firms.

THURSDAY

Italy Final HICP: Italian HICP is seen confirmed at +0.2% m/m and a 0.8pp deceleration to +9.9% y/y.

ECB Rate Decision: The ECB has telegraphed a 50bp for the March 16 ECB meeting, and the upside surprises to February HICP and core HICP reaching a fresh high have increased the chances of another 50bp hike in May. Markets will be looking for the ECB to give another indication of the rate path going forward at Thursday’s meeting, after recent central-bank rhetoric underlined division in the Governing Council.

The ECB will also release a fresh round of macroeconomic projections. Keep an eye out for the comprehensive MNI preview next week.

FRIDAY

UK BOE Inflation Attitudes Survey: The quarterly BOE/Ipsos inflation attitudes survey will supply evidence of consumer CPI expectations, after December 12-month expectations edged down, whilst increasing for 24-month outlooks as longer-term expectations became more entrenched.

Eurozone Final HICP: Eurozone HICP surprised to the upside in the flash February data, whereby the 0.3pp acceleration in core HICP to +5.6% y/y will have strongly underlined hawkish sentiment at the ECB. In the flash data, HICP for the bloc had been stickier than expected, slowing a modest 0.1pp to +8.5% y/y. So far, German HICP was confirmed at the flash level. Larger revisions to Spanish, French and Italian final prints this week would be necessary to budge the aggregate print.

US Industrial Production & Prelim Michigan Sentiment Index: Utilities were the culprit for the overall miss in January's US IP which stalled after warm January weather saw heating demand fall. As such, the +0.5% m/m uptick pencilled in for February will likely signal more of a continuation of modest growth rather than a rebound.

The March prelim Michigan Sentiment Index is expected to hold steady at 67.0, the highest since January 2022. Consumer sentiment has been recently boosted by improvements in the short-run economic outlook. Markets will be eyeing any further upticks in inflation expectations ahead of the March Fed meeting.

US CPI - Source US BLS:

Date	GMT/Local	Impact	Flag	Country	Event
13/03/2023	-			EU	ECB Panetta at Eurogroup Meeting
13/03/2023	1230/0830	*		CA	Household debt-to-disposable income
13/03/2023	1530/1130	*		US	US Treasury Auction Result for 13 Week Bill
13/03/2023	1530/1130	*		US	US Treasury Auction Result for 26 Week Bill
13/03/2023	1805/1805			UK	BOE Dhingra Panellist at International Women’s Day event
14/03/2023	0700/0700	***		UK	Labour Market Survey
14/03/2023	0800/0900	***		ES	HICP (f)
14/03/2023	0900/1000	*		IT	Industrial Production
14/03/2023	1000/1000	**		UK	Gilt Outright Auction Result
14/03/2023	1000/0600	**		US	NFIB Small Business Optimism Index
14/03/2023	-			EU	ECB de Guindos at ECOFIN Meeting
14/03/2023	1230/0830	***		US	CPI
14/03/2023	1255/0855	**		US	Redbook Retail Sales Index
14/03/2023	1400/1000	*		US	Services Revenues
14/03/2023	2120/1720			US	Fed Governor Michelle Bowman
15/03/2023	0200/1000	***		CN	Fixed-Asset Investment
15/03/2023	0200/1000	***		CN	Retail Sales
15/03/2023	0200/1000	***		CN	Industrial Output
15/03/2023	0200/1000	**		CN	Surveyed Unemployment Rate
15/03/2023	0700/0800	***		SE	Inflation report
15/03/2023	0745/0845	***		FR	HICP (f)
15/03/2023	1000/1000	**		UK	Gilt Outright Auction Result
15/03/2023	1000/1100	**		EU	Industrial Production
15/03/2023	1100/0700	**		US	MBA Weekly Applications Index
15/03/2023	-			UK	Chancellor Delivers Spring Budget, OBR Forecasts, Likely DMO Remit
15/03/2023	1215/0815	**		CA	CMHC Housing Starts
15/03/2023	1230/0830	***		US	Retail Sales
15/03/2023	1230/0830	***		US	PPI
15/03/2023	1230/0830	**		US	Empire State Manufacturing Survey
15/03/2023	1300/0900	*		CA	CREA Existing Home Sales
15/03/2023	1400/1000	*		US	Business Inventories
15/03/2023	1400/1000	**		US	NAHB Home Builder Index
15/03/2023	1430/1030	**		US	DOE Weekly Crude Oil Stocks
15/03/2023	2000/1600	**		US	TICS
16/03/2023	0030/1130	***		AU	Labor force survey
16/03/2023	0700/0800	**		NO	Norway GDP
16/03/2023	0900/1000	**		IT	Italy Final HICP
16/03/2023	1230/0830	**		US	Jobless Claims
16/03/2023	1230/0830	**		US	WASDE Weekly Import/Export
16/03/2023	1230/0830	***		US	Housing Starts
16/03/2023	1230/0830	**		US	Import/Export Price Index
16/03/2023	1230/0830	**		US	Philadelphia Fed Manufacturing Index
16/03/2023	1245/1345	***		EU	ECB Deposit Rate
16/03/2023	1245/1345	***		EU	ECB Main Refi Rate
16/03/2023	1245/1345	***		EU	ECB Marginal Lending Rate
16/03/2023	1345/1445			EU	ECB Press Conference Following Rate Decision
16/03/2023	1430/1030	**		US	Natural Gas Stocks
17/03/2023	0700/0800	**		SE	Unemployment
17/03/2023	0930/0930	**		UK	Bank of England/Ipsos Inflation Attitudes Survey
17/03/2023	1000/1100	***		EU	HICP (f)
17/03/2023	1230/0830	*		CA	Industrial Product and Raw Material Price Index
17/03/2023	1315/0915	***		US	Industrial Production
17/03/2023	1400/1000	***		US	University of Michigan Sentiment Index (p)