Daily update
Daily update
- Markets await US March consumer price inflation data, due for release on Wednesday. Federal Reserve Chair Powell’s 2022 policy errors elevated the importance of consumer price inflation, and thus downgraded the importance of actual, real-world inflation. The details of the inflation data may be important. City-based inflation figures, and the trends in price levels (and inflation) for high frequency purchases are politically relevant ahead of the November elections.
- German February trade data showed a more marked slowdown in exports than had been expected (although few economists bother to forecast German trade nowadays). Within Europe, Germany struggles as being a more prominent exporter of goods than being an exporter of fun. Further, German goods exports do not fit so readily into the artificial intelligence craze.
- There are a few central bank speakers on the agenda, but markets are unlikely to react to additional comments at this stage—it is the swings in data that are creating market volatility.
- Tensions between the US and China may be a focus. US Treasury Secretary Yellen warned about China’s corporate support for Russia’s war effort, and suggested export led-growth was impractical for China. There is no economic constraint on a country’s export market share, but China may have reached a realistic political limit.
