Euro area CPI
According to Eurostat, the annual consumer price index (CPI) slowed to 6.9% in March 2023, from 8.5% in February. The headline inflation was slightly below the market forecasts of 7.1%.
Market Overview
FED
The market has been shaken by recent events in the banking sector, with the solvency problems of some US regional banks and the UBS takeover of Credit Suisse.
ECB
The financial turmoil caused by the failures of the Silicon Valley Bank and the Signature Bank has led to a repricing of expectations of rate hikes by central banks. Fear of bank contagion was fueled by the news of Credit Suisse teetering.
Market Lights – The Stuck Powell
For the Federal Reserve, the choice had always been: to raise rates aggressively to beat inflation, or to do it more gently to avoid a recession?
Nonfarm Payroll
This week’s focus was on Fed Chair Powell’s testimony on monetary policy to the Congress and the US labor market data.
Euro area CPI
The headline inflation fell slightly to 8.5% in February 2023, from 8.6% the prior month and the lowest since May 2022.
Euro area PMI
This week the focus is on the Purchasing Managers’ Index (PMI), a good indicator of the health of the economy, which is in a context of high inflation and aggressive tightening of monetary policy.
UK economy
Pressure on UK households and businesses remains as inflation persists. Despite slowing for two consecutive months, UK annual inflation is still at record highs and well above the central bank’s 2% target.
FED
The Federal Reserve increased the funds rate by 25 basis points at the first FOMC meeting of 2023. It follows a half a percentage point increase in December, making it the smallest increase since the central bank started raising rates last March.
US GDP
According to the US Bureau of Economic Analysis, US GDP Advance for the fourth quarter of 2022 expanded by 2.9%,
