MNI US OPEN: Inflation Remains The Focus

EXECUTIVE SUMMARY:

• ECB'S LAGARDE: INFLATION DRIVERS WILL EASE GRADUALLY IN 2022
• GERMAN PRODUCER PRICE INFLATION BEATS EXPECTATIONS, ALL-TIME HIGH
• NORGES BANK HOLDS, SAYS MARCH HIKE LIKELY
• UKRAINE BRUSHES OFF BIDEN COMMENTS, WELCOMES WEST'S COORDINATION ON RUSSIA

Fig. 1: German PPI Soars To Record High

Source: DeStatis, MNI

NEWS:

ECB (RTRS): Inflation in the euro zone will decrease gradually over the year as its main drivers, such as surging energy prices and supply bottlenecks, are expected to ease, European Central Bank (ECB) head Christine Lagarde told France Inter radio. "This will stabilise and ease gradually in the course of 2022," she said. Asked on her policy to counter price pressures, Lagarde reiterated that the ECB did not need to act as boldly as the U.S. Federal Reserve because of a different economic situation.

NORGES BANK: Norges Bank left its policy rate on hold at 0.5% Thursday and restated its guidance that the rate "will most likely be raised in March." The Monetary Policy and Financial Stability Committee's decision, at Governor Oystein Olsen's final meeting, was widely expected with Norges Bank on the tightening path but with the January meeting only an interim one and policy changes taking place in the quarterly forecast round meetings, the next one of which is in March.

UKRAINE / RUSSIA / U.S. (RTRS): Ukraine does not see comments by U.S. President Joe Biden, when he said Russia could carry a lower cost for an "incursion" rather than an "invasion" of Ukraine, as deviating from U.S. policy, a senior Ukrainian adviser told Reuters on Thursday. Mykhailo Podolyak, an adviser to President Volodymyr Zelenskiy's office, said Ukraine welcomed that Biden had signalled a coordinated Western response in case Russia made a move on Ukraine. "It is definitely not worth evaluating the words spoken the day before as something separate from the integral policy of the American administration," he wrote in a message.

UK POLITICS (BBG): A U.K. Conservative lawmaker accused Boris Johnson’s parliamentary fixers of “intimidation” and “blackmail” as they tried to fend off a challenge to the prime minister’s leadership, and urged members of Parliament to report the matter to the police.“In recent days a number of MPs have faced pressures and intimidation from members of the government because of their declared or assumed desire for a vote of confidence in the party leadership of the prime minister,” William Wragg, who chairs Parliament’s influential Public Administration and Constitutional Affairs Committee, said at a hearing on Thursday.

UK POLITICS (RTRS): Six in 10 people in Britain now have an unfavourable opinion of Prime Minister Boris Johnson following revelations of parties held at his residence during COVID-19 lockdowns, pollster Ipsos Mori said on Thursday. Ipsos also said that 57% believe Johnson is a bad prime minister, up 6 percentage points since last week. Finance minister Rishi Sunak was the only senior minister to get a net positive score when respondents were asked.

GERMAN ISSUANCE (RTRS): Issuing ultra-long debt may be a bit more challenging in an environment of rising bond yields, an official at Germany's debt management office said on Thursday. "We are a continuous issuer so we have to deal with the market we are faced with but we can play with the portfolio," said Christian Wellner, head of strategy at Germany's Finanzagentur. "So, we can listen to what they (markets) are asking, so maybe issuing ultras maybe be a bit more challenging," he said during an OMFIF debate on the outlook for European sovereign borrowing.

MALAYSIA (MNI STATE OF PLAY): Bank Negara Malaysia on Thursday kept its monetary policy powder dry on setting the stage for a rate hike this year, citing both a rebound in economic activity but warning that the outlook remains "tilted to the downside." The central bank today left its Overnight Policy Rate unchanged at the record low of 1.75%, the level it has been since the last cut in July 2020, and its accompanying statement - which had expected to hint at a rate rise later this year - was instead neutral in tone.

INDONESIA: Indonesia's central bank kept its benchmark rate unchanged at 3.5% at the Board of Governors' meeting on Thursday. Bank Indonesia also maintained other key interest rates unchanged, with the Overnight Deposit Facility at 2.75% and the Overnight Lending Facility at 4.25

DATA:

LOOK AHEAD:

Date	GMT/Local	Impact	Flag	Country	Event
20/01/2022	1100/0600	*		TR	Turkey Benchmark Rate
20/01/2022	1230/1330			EU	ECB publishes Dec meet accounts
20/01/2022	1330/0830	**		US	Jobless Claims
20/01/2022	1330/0830	**		US	Philadelphia Fed Manufacturing Index
20/01/2022	1330/0830	**		US	WASDE Weekly Import/Export
20/01/2022	1500/1000	***		US	NAR existing home sales
20/01/2022	1530/1030	**		US	Natural Gas Stocks
20/01/2022	1600/1100	**		US	DOE weekly crude oil stocks
20/01/2022	1630/1130	*		US	US Bill 08 Week Treasury Auction Result
20/01/2022	1630/1130	**		US	US Bill 04 Week Treasury Auction Result
20/01/2022	1800/1300	**		US	US Treasury Auction Result for TIPS 10 Year Note
21/01/2022	2330/0830	***		JP	CPI
21/01/2022	0001/0001	**		UK	Gfk Monthly Consumer Confidence
21/01/2022	0700/0700	***		UK	Retail Sales
21/01/2022	1230/1330			EU	ECB Lagarde on Global Economic Outlook at WEF
21/01/2022	1300/1300			UK	BOE Mann speaks at OMFIF
21/01/2022	1330/0830	**		CA	Retail Trade
21/01/2022	1500/1600	**		EU	consumer confidence indicator (p)