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MNI GLOBAL WEEK AHEAD - US CPI and ECB Headline

MONDAY - BSP DECISION

The BSP is likely to keep a steady hand at next week’s policy meeting. This would see the policy rate maintained at 6.50%, where it has been since October last year. The sell-side consensus also looks for a steady outcome at the meeting.

WEDNESDAY - RBNZ DECISION

The RBNZ is firmly on hold and there appears to be a high bar for it to shift rates in either direction for now. When it meets on April 10, we expect it to leave rates again at 5.5% where they have been since May last year. While it is more confident than it was that it would achieve target as expected, it’s not there yet. So it is too early to talk about monetary easing.

WEDNESDAY - BANK OF THAILAND DECISION

The Bank of Thailand is set to ignore government calls again to cut rates to support lacklustre growth and keep rates at 2.5%, which is widely expected. The central bank sees its current rate as “broadly neutral” and “appropriate” and that weak growth is due to structural factors which it can’t change. It is also focussed on the outlook rather than individual data points. While cuts are not likely until H2, an increase in support for easing on the MPC would likely bring this forward.

WEDNESDAY - US CPI

Wednesday’s US CPI report for March provides the main data interest of the week and could help set the tone for the May 1 FOMC decision despite being so far out. The surprise acceleration in core CPI and PCE measures over the first two months of the year has for the most part seen FOMC participants have less confidence in a sustainable return to 2% inflation. It has prompted markets to push back the starting point for Fed cuts to the July meeting, and with slightly less than the three cuts the median FOMC participant expects for 2024. Core CPI has accelerated to 4.2% and 3.9% annualized over three- and six-month run rates as of February. Consensus for a 0.3% M/M would see that three-month nudge a little higher to 4.3% whilst the six-month would inch a tenth lower to 3.8%.

WEDNESDAY - BANK OF CANADA DECISION

The Bank of Canada is again seen holding its policy rate at 5% on Wednesday, although odds have grown that it at least partially paves the way for a first cut in June. There has been a second soft CPI report with strong disinflationary progress across a variety of “underlying” measures. Further, the unemployment rate saw a surprisingly large 0.3pp jump to 6.1% in March for a now more than 1pp increase over the past year, an increase implying recessionary conditions. On the flip side though, economic growth has come in firmly stronger than expected (albeit boosted by supply side developments) and wage growth is still stubbornly holding a 5% Y/Y handle, which could warrant further BoC caution rather than overly opening the door to a June cut.

WEDNESDAY - FOMC MARCH MEETING MINUTES

With most Fed officials having already weighed in on their rate cut views since mid-March, the market's main focus for the minutes of the March 19-20 FOMC meeting (released Wed Apr 10, 1400ET/1900BST) will be the Committee's discussion on slowing the pace of balance sheet runoff. Chair Powell noted at the time that they "discussed issues related to slowing the pace of decline in our securities holdings. While we did not make any decisions today on this, the general sense of the committee is that it will be appropriate to slow the pace of runoff fairly soon". His emphasis on "fairly soon" led many market participants to pencil in May's meeting for the release of a preliminary plan to taper QT, and the upcoming minutes are expected to include the most recent thinking on that subject -potentially including a rough timeline. Other topics to watch include the degree of consensus around starting rate cuts this year, the newfound emphasis on "unexpected weakening in the labor market" as a catalyst for easing, and any discussion around the longer run rate median in the "Dot Plot".

THURSDAY - ECB DECISION

The ECB is unanimously expected to leave rates on hold at its April meeting, with most focus on the framing of communication surrounding a likely rate cut in June. Markets are almost fully pricing a first 25bp rate cut in June, and recent ECB communication has seen Governing Council members across the hawk-dove spectrum seemingly converge towards this meeting as the likely candidate to begin easing. However, with services inflation still sticky (at 4.0% Y/Y for the fifth consecutive month following the March flash release) and a lack of visibility on Q1 wage/national accounts data, President Lagarde will likely stick with the message that the ECB will have “a lot more data” by June to decide on rate cuts, without providing explicit guidance. Our latest ECB sources piece indicated that there are still divisions amongst the Governing Council as to whether a clear easing path should be signalled at upcoming meetings.

FRIDAY - BANK OF KOREA DECISION

BoK is widely expected to keep rates at 3.5% again when it meets on April 12. While March CPI inflation was steady at 3.1%, core eased further to 2.4% from 2.6%, which will reassure the central bank that it has inflation contained. But with headline above 3% again, it is too soon to talk about a pivot.

FRIDAY - BOE BERNANKE REVIEW

The Bank of England is due to release Ben Bernanke's review of the BOE's forecasting for monetary policy making and communication on Friday at midday BST (13:00CET / 7:00ET). An FT article earlier in the week noted that one of the recommendations will be to remove fan charts from the MPR and replace them with more comprehensive alternative scenarios. We would still expect to see fan charts in the May MPR - so a change earlier than that would likely be a surprise and allow potentially a bigger pivot to policy in May. If there is scope to introduce some of the new metrics in August - that could potentially help to delay the first cut (which we think still looks to be most likely in June or August) until August, to be accompanied by some new communication.* The market will probably not be able to make much of a judgment on any recommendations regarding alternative scenarios until the plans are more fleshed out and see in practice, but any introduction of the dots would be of definite interest to market participants (but current MPC members haven't seemed keen in the past).

DateGMT/LocalImpactFlagCountryEvent
08/04/20242301/0001UK KPMG-REC Jobs Report
08/04/20240130/1130**AU Lending Finance Details
08/04/20240500/1400JP Economy Watchers Survey
08/04/20240545/0745**CH Unemployment
08/04/20240600/0800**DE Trade Balance
08/04/20240600/0800**DE Industrial Production
08/04/20241530/1630UK BOE's Breeden Panellist at 'Towards the future of the monetary system'
08/04/20241530/1130*US US Treasury Auction Result for 13 Week Bill
08/04/20241530/1130*US US Treasury Auction Result for 26 Week Bill
09/04/20242301/0001*UK BRC-KPMG Shop Sales Monitor
09/04/20240645/0845*FR Foreign Trade
09/04/20240900/1000**UK Gilt Outright Auction Result
09/04/20241000/0600**US NFIB Small Business Optimism Index
09/04/20241255/0855**US Redbook Retail Sales Index
09/04/20241530/1130*US US Treasury Auction Result for Cash Management Bill
09/04/20241700/1300***US US Note 03 Year Treasury Auction Result
10/04/20240200/1400***NZ RBNZ official cash rate decision
10/04/20240600/0800**SE Private Sector Production m/m
10/04/20240600/0800***NO CPI Norway
10/04/20240800/1000*IT Retail Sales
10/04/20240900/1000**UK Gilt Outright Auction Result
10/04/20241100/0700**US MBA Weekly Applications Index
10/04/2024-***CN Money Supply
10/04/2024-***CN New Loans
10/04/2024-***CN Social Financing
10/04/20241230/0830***US CPI
10/04/20241230/0830*CA Building Permits
10/04/20241345/0945CA BOC Monetary Policy Report
10/04/20241345/0945***CA Bank of Canada Policy Decision
10/04/20241400/1000**US Wholesale Trade
10/04/20241430/1030**US DOE Weekly Crude Oil Stocks
10/04/20241430/1030CA BOC Governor Press Conference
10/04/20241645/1245US Chicago Fed's Austan Goolsbee
10/04/20241700/1300**US US Note 10 Year Treasury Auction Result
10/04/20241800/1400**US Treasury Budget
10/04/20241800/1400***US FOMC Minutes
11/04/20240130/0930***CN CPI
11/04/20240130/0930***CN Producer Price Index
11/04/20240600/0800**NO Norway GDP
11/04/20240800/1000*IT Industrial Production
11/04/20241215/1415***EU ECB Deposit Rate
11/04/20241215/1415***EU ECB Main Refi Rate
11/04/20241215/1415***EU ECB Marginal Lending Rate
11/04/20241230/0830***US Jobless Claims
11/04/20241230/0830**US WASDE Weekly Import/Export
11/04/20241230/0830***US PPI
11/04/20241245/1445EU ECB Monetary Policy Press Conference
11/04/20241245/0845US New York Fed's John Williams
11/04/20241430/1030**US Natural Gas Stocks
11/04/20241600/1200***US USDA Crop Estimates - WASDE
11/04/20241600/1200US Boston Fed's Susan Collins
11/04/20241630/1730UK BOE's Greene at Delphi Economic Forum on Greece
11/04/20241700/1300***US US Treasury Auction Result for 30 Year Bond
12/04/20240430/1330**JP Industrial Production
12/04/20240600/0700**UK UK Monthly GDP
12/04/20240600/0700**UK Trade Balance
12/04/20240600/0700**UK Index of Services
12/04/20240600/0700***UK Index of Production
12/04/20240600/0700**UK Output in the Construction Industry
12/04/20240600/0800***DE HICP (f)
12/04/20240600/0800***SE Inflation Report
12/04/20240600/0700UK BOE's Greene Panellist at Delphi Economic Forum on US vs Europe Growth
12/04/20240645/0845***FR HICP (f)
12/04/20240700/0900***ES HICP (f)
12/04/20241100/1200UK BOE's Bernanke Review of Forecasting for Monetary Policymaking
12/04/20241100/1300EU ECB's Elderson Speaks At Delphi Economic Forum
12/04/2024-***CN Trade
12/04/20241200/0800US San Francisco Fed's Mary Daly
12/04/20241230/0830**US Import/Export Price Index
12/04/20241300/0900*CA CREA Existing Home Sales
12/04/20241400/1000**US U. Mich. Survey of Consumers
12/04/20241700/1300**US Baker Hughes Rig Count Overview - Weekly

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