Week Ahead as US Inflation Debate Heats Up

All eyes will be on the Bureau of Labor Statistics this week, as the most recent index of consumer and producer prices is expected to intensify the continuing discussion of whether American inflation has peaked or still has room to increase. It is anticipated that in March, the headline inflation rate increased by 0.3% from month to month, bringing the annual rate down from 6% to 5.2%. Moreover, core inflation is probably up 0.3% from the previous month, keeping the annual rate at 5.6%. The producer prices, on the other hand, are anticipated to remain flat month over month, which will cause the annual rate to decline to 3.1% from 4.6%, which could be the lowest reading since March/February 2021. Although it is anticipated that core producer inflation will increase by 0.3% during that time, the yearly rate will drop to 3.3% from 4.4%.

The US central bank’s decision to terminate its tightening cycle in May may be influenced by these facts. Together with the announcement of the consumer and producer price indices, a 0.4% month-over-month fall in retail sales is anticipated in the March report. Investors will also be watching the release of the FOMC meeting minutes as well as the consumer confidence and inflation forecasts for April from the University of Michigan. In the UK, monthly GDP figures will be released along with data on industrial production, construction output, and trade balance. Following a 0.3% growth in January, the UK economy is anticipated to have expanded by 0.2% in February, while industrial production is anticipated to increase.

NewsOTG gathered that Investors in the Euro Area are anticipated to pay close attention to industrial production, which is anticipated to increase for a second consecutive month in February, while retail sales are anticipated to decline following a modest recovery in January. Updated CPI statistics are also anticipated to confirm a general reduction in inflation, particularly in Germany, Spain, and France. It is also anticipated that special attention will be paid to Italy’s industrial activity, Turkey’s unemployment rate, and Germany’s wholesale prices and current account.

Asia’s markets are anticipated to be affected by China’s trade balance, inflation rate, and loan growth for March, particularly in light of recent PMI data that increased doubt on the effect of the country’s economic reform on growth. Investors also eagerly await the results of the March consumer sentiment survey in Japan. One week after the central bank paused its tightening cycle, the retail inflation rate in India is anticipated to decrease back to the RBI’s upper target band due to slower food inflation in emerging Asia. The most recent meeting minutes of the RBA will also be made public in Australia, along with important indicators of the economy’s future, including March’s unemployment statistics and data on business and consumer optimism from Westpac and NAB, respectively. New Zealand will finally disclose the Q1 inflation rate.
Investors eagerly monitor economic data releases to determine the direction of their investments as the world’s economies continue to struggle with the pandemic’s effects. Market reactions to the following week’s economic data are inevitable, especially in the US where the inflation discussion is becoming more heated.