EU inflation remains a concern ahead upcoming ECB decision – FXStreet

Credit: Original article can be found here


EU mid-market update: EU inflation remains a concern ahead upcoming ECB decision; CS shares trade at record lows.


– Banking contagion fears eased for now; CS still lingers at record lows.

– ECB seen sticking with its planned 50bps rate hike this week.

– France Feb Final CPI revised higher to a fresh cycle high.

– Hot Feb CPI data for Sweden puts pressure on Riksbank to raise Repo Rate by 50bps at both the Apr and Jun meetings.


– China PBOC 1-year MLF operation provided a net injection of CNY281B [largest since Dec 2020].

– China Feb Industrial Production Y/Y: 2.4% v 2.6%e – China Feb Retail Sales YTD Y/Y: 3.5% v 3.5%e.

– China Feb YTD Fixed Urban Assets Y/Y: 5.5% v 4.5%e.

– China Feb YTD Property Investment Y/Y: -5.7% v -8.5%e.

– China Feb Surveyed Jobless Rate: 5.6% v 5.3%e.

– New Zealand Q4 Current Account (NZ$): -9.5B v -7.7Be (record deficit); concern that the country’s sovereign credit rating could come under pressure.

– Japan Fin Min Suzuki stated that the Govt would debate fate of BOJ-Govt Joint Statement with new BOJ Governor, so premature to comments on specifics.

– BOJ Jan Minutes (two decisions ago) reiterated importance of current monetary easing policy. Inflation likely to slow toward latter half of next fiscal year.


– US Congressional delegation to visit Taiwan from Mar 15-16th.


– Fed’s Bowman (voter) stated that the Fed continued to carefully monitor market developments, banking system remaineds resilient.

Fed said to be considering weighing tougher capital, liquidity rules for midsize banks following SVB & Signature failures.

– Russia [Su-27] fighter jet collided with US MQ-9 Reaper drone over the Black Sea; Drone damaged and forced to land.


– Weekly API Crude Oil Inventories: +1.2M v -3.8M prior.

– Saudi Oil Min Abdulaziz stated that OPEC+ alliance would stick to production cuts to end of 2023.

Speakers/fixed income/FX/commodities/erratum


Indices [Stoxx600 -0.88% at 445.60, FTSE -1.16% at 7,548.50, DAX -0.90% at 15,095.05, CAC-40 -1.38% at 7,043.27, IBEX-35 -1.66% at 9,006.55, FTSE MIB -1.67% at 26,353.00, SMI -0.83% at 10,627.30, S&P 500 Futures -0.41%].

Market focal points/key themes: European indices open lower across the board and fell further into the red as the session wore on; better performing sectors include utilities and telecom; sectors leading the way lower include consumer discretionary and energy; Credit Suisse extended losses throughout the session to record low following Saudi investor comments; Hyve receives superior, recommended takeover offer from Providence; Purplebricks confirms is in potential merger talks with Strikes; corporate events expected in the upcoming US session include earnings Adobe and Groupon, as well as an investor presentation from Volkswagen.


– Consumer discretionary: H&M [HMB.SE] -6.0% (sales), Inditex [ITX.ES] -3.0% (earnings).

Consumer staples: Hyve Group [HYVE.UK] +12.5% (recommends approved offer).

Financials: Credit Suisse [CSGN.CH] -10.0% (Saudi comments on further stake).

Industrials: BMW [BMW.DE] +1.0% (final results, comments on outlook), Balfour Beatty [BBY.UK] +3.0% (earnings), GN Store Nord [GN.DK] +2.0% (cancels rights issue plan).

Technology: Infineon [IFX.DE] -1.0%, ASML [ASML.NL] -0.5% (Foxconn results and outlook).

Utilities: E.ON [EOAN.DE] +1.5% (final results).


ECB said to be leaning toward a 50bps rate hike at this week’s meeting citing the calming of recent volatility and stubborn inflation readings. ECB new projection to still show inflation significantly above 2% in 2024 and slightly above target in 2025.

EU Commission Pres Von der Leyen stated that have found solutions for US climate law issues; Agreed with EU carmakers to access to US tax breaks.

UK energy regulator OFGEM confirmed the extension to the Energy Price Guarantee cap at £2,500 for an additional three months until June 2023.

Denmark Central Bank updated its economic outlook which raised the 2023 GDP from -0.1% to +0.9% while maintaining 2024 GDP growth at 1.2%. It saw 2023 CPI at 4.0%.

German IFO Institute report maintained the 2023 domestic GDP growth at -0.1% while raising 2024 GDP growth from 1.6% to 1.7%. It cut the 2023 German CPI from 6.4% from 6.2% and also cut the 2024 CPI from 2.8% to 2.2%.

German IfW Institute Report forecasted 2023 CPI at 5.4% and 2024 CPI at 2.1%; Raised slightly 2023-2024 domestic GDP outlook.

Turkey said to approve Finland’s NATO bid separately from Sweden by May 14th’s Turkey elections.

Japan PM Kishida stated to raise minimum wages beyond ¥1,000 nationwide; Aiming to improve environment with policies to raise wages.

China said to cut steel production for 3rd year to hit its climate goals.

China PBOC stated that the country’s financial operations were prudent; Reiterated risks in China’s financial system are controllable.

IEA Monthly Oil Report (OMR) maintained its 2023 global oil demand growth at2.1M bpd (demand seen at 102.0M vs. prior 101.9M bpd) while raising the 2023 global oil supply from 101.3M bpd to 101.6M bpd. Market was caught in the cross-currents of supply outstripping still-lackluster demand. Russian oil exports fell by 500 kb/d to 7.5 mb/d in February as the EU embargo on refined oil products came into force.

Currencies/fixed income

– USD was steady in trading on Wed after some weakness as markets dialed back bets on a potential Fed rate cut due to contagion concerns from the recent regional banking crisis.

– EUR/USD trading around 1.0730 ahead of Thursday ECB rate decision. A looming rate hike in Europe had the euro on a firm footing. ECB said to be still leaning toward a 50bps rate hike at this week’s meeting citing the calming of recent volatility and stubborn inflation readings. France Feb Final CPI was revised higher to a fresh cycle high.

– A hot Feb CPI reading for Sweden continued to put pressure on Riksbank to raise Repo Rate by 50bps at both the Apr and Jun meetings.

Economic data

– (FI) Finland Jan GDP Indicator Y/Y: 1.4% v 0.4% prior.

– (FI) Finland Jan Final Retail Sales Volume Y/Y: -3.2% v -4.0% prelim.

– (DE) Germany Feb Wholesale Price Index M/M: 0.1% v 0.2% prior; Y/Y: 8.9% v 10.6% prior.

– (SE) Sweden Feb CPI M/M: 1.1% v 0.9%e; Y/Y: 12.0% v 11.7%e; CPI Level: 395.82 v 394.92e.

– (SE) Sweden Feb CPIF M/M: 0.9% v 0.7%e; Y/Y: 9.4% v 9.2%e.

– (SE) Sweden Feb CPIF (ex-energy) M/M: 1.5% v 1.0%e; Y/Y: 9.3% v 8.7%e.

– (NO) Norway Feb Trade Balance (NOK): 79.3B v 99.9B prior.

– (DK) Denmark Feb PPI M/M: -0.3% v -1.0% prior; Y/Y: 8.3% v 10.5% prior.

(FR) France Feb Final CPI M/M: 1.0% v 0.9% prelim; Y/Y: 6.3% v 6.2% prelim (highest annual pace since 1985); CPI (ex-tobacco) Index: 115.06 v 114.90e.

– (FR) France Feb Final CPI EU Harmonized M/M: 1.1% v 1.0% prelim; Y/Y: 7.3% v 7.2% prelim.

– (CZ) Czech Feb PPI Industrial M/M: -0.3% v +0.4%e; Y/Y: 16.0% v 16.8%e.

– (CZ) Czech Jan Export Price Index Y/Y: 8.6% v 8.1% prior; Import Price Index Y/Y: 8.1% v 9.6% prior.

– (TR) Turkey Feb Central Govt Budget Balance (TRY): -170.6B v -32.2B prior.

(IT) Italy Q4 Unemployment Rate: 7.8% v 8.0% prior.

– 05:00 (IS) Iceland Feb International Reserves (ISK): 837B v 841B prior.

– (PL) Poland Feb CPI M/M: 1.2% v 0.8%e; Y/Y: 18.4% v 18.5%e (highest annual pace since 2001).

– (IT) Italy Jan General Government Debt: €2.757T v €2.763T prior.

Fixed income issuance

– (IN) India sold total INR390B vs. INR390B indicated in 3-month, 6-month and 12-month bills.

– (DK) Denmark sold total DKK5.38B in 3-month and 6-month Bills.

Looking ahead

– (NG) Nigeria Feb CPI Y/Y: 21.8%e v 21.8% prior.

– (DE) Germany Jan Current Account: No est v €24.3B prior.

– 06:00 (EU) Euro Zone Jan Industrial Production M/M: +0.3%e v -1.1% prior; Y/Y: +0.3%e v -1.7% prior.

– 06:00 (EU) Daily Euribor Fixing.

– 06:00 (EU) ECB, BOE and SNB hold weekly 7-day USD Liquidity Tender.

– 06:00 (SE) Sweden to sell SEK2.0B in 1.75% Nov 2033 bonds.

– 06:00 (NO) Norway to sell NOK2.0B in 1.5% Feb 2026 Bonds.

06:30 (DE) Germany to sell combined €2.5B in 2050 and 2053 Bunds.

– 07:00 (RU) Russia to sell OFZ Bonds (3 tranches).

– 07:00 (US) MBA Mortgage Applications w/e Mar 10th: No est v 7.4% prior.

– 07:00 (ZA) South Africa Jan Retail Sales M/M: -0.2%e v -0.6% prior; Y/Y: -2.0%e v -0.6% prior.

– 07:00 (IE) Ireland Jan Industrial Production M/M: No est v -8.5% prior; Y/Y: No est v -6.8% prior.

– 07:00 (IE) Ireland Jan Trade Balance: No est v €6.0B prior.

– 07:00 (IE) Ireland Jan Property Prices M/M: No est v 0.3% prior; Y/Y: No est v 7.8% prior.

– 07:55 (US) Daily Libor Fixing.

– 08:00 (UK) Weekly PM Question time in House.

– 08:15 (CA) Canada Feb Annualized Housing Starts: 220.0Ke v 215.4K prior.

– 08:30 (US) Mar Empire Manufacturing: -7.8e v -5.8 prior.

– 08:30 (US) Feb PPI Final Demand M/M: 0.3%e v 0.7% prior; Y/Y: 5.4%e v 6.0% prior.

– 08:30 (US) Feb PPI (ex-food/energy) M/M: 0.4%e v 0.5% prior; Y/Y: 5.2%e v 5.4% prior.

– 08:30 (US) Feb PPI (ex-food/energy/trade) M/M: 0.3%e v 0.6% prior; Y/Y: 4.8%e v 4.5% prior.

08:30 (US) Feb Advance Retail Sales M/M: -0.4%e v +3.0% prior; Retail Sales (Ex-Auto) M/M: 0.0%e v 2.3% prior; Retail Sales (ex-auto/gas): -0.2%e v +2.6% prior; Retail Sales (control group): -0.3%e v +1.7% prior.

– 08:30 (UK) Chancellor of the Exchequer Presents Spring Budget to Parliament.

– (UK) DMO Gilt Remit: Survey: UK to issue £ in Gilts over next fiscal Year.

– 09:00 (CA) Canada Feb Existing Home Sales M/M: +3.0%e v -3.0% prior.

– 09:00 (UK) Daily Baltic Dry Bulk Index.

– 10:00 (US) Jan Business Inventories: 0.0%e v 0.3% prior.

– 10:00 (US) Mar NAHB Housing Market Index: 40e v 42 prior.

– 10:30 (US) Weekly DOE Oil Inventories.

– 11:00 (PE) Peru Feb Unemployment Rate: No est v 8.0% prior.

– 11:00 (PE) Peru Jan Economic Activity Index (Monthly GDP) Y/Y: -0.9%e v +0.9% prior.

– 11:00 (CO) Colombia Jan Manufacturing Production Y/Y: 0.5%e v 0.5% prior; Industrial Production Y/Y: No est v 0.7% prior.

– 11:00 (CO) Colombia Jan Retail Sales Y/Y: -1.8%e v -1.8% prior.

– 11:30 (US) Treasury to sell 17-Week Bills.

– 12:00 (CA) Canada to sell 10 Year Bonds.

– 12:30 (IL) Israel Feb CPI M/M: 0.3%e v 0.3% prior; Y/Y: 5.0%e v 5.4% prior.

– 15:00 (AR) Argentina Jan Capacity Utilization: No est v 63.8% prior.

– 16:00 (US) Jan Net Long-term TIC Flows: No est v $152.8B prior; Total Net TIC Flows: No est v $28.6B prior.

– 17:45 (NZ) New Zealand Q4 GDP Q/Q: -0.2%e v +2.0% prior; Y/Y: 3.3%e v 6.4% prior.

– 19:50 (JP) Japan Feb Trade Balance: -¥1.150Te v -¥3.5T prior; Adj Trade Balance: -¥1.475Te v -¥1.821T prior; Exports Y/Y: 7.0%e v 3.5% prior; Imports Y/Y: 12.4%e v 17.8% prior.

– 19:50 (JP) Japan Jan Core Machine Orders M/M: 1.4%e v 1.6% prior; Y/Y: -3.9%e v -6.6% prior.

– 20:00 (AU) Australia Mar Consumer Inflation Expectation Survey: No est v 5.1% prior.

– 20:30 (AU) Australia Feb Employment Change: +50.0Ke v -11.5K prior; Unemployment Rate: 3.6%e v 3.7% prior; Full Time Employment Change: No est v -43.3K prior; Part Time Employment Change: No est v +31.8K prior; Participation Rate: 66.6%e v 66.5% prior.

– 21:30 (CN) China Feb New Home Prices M/M: No est v 0.0% prior.

– 22:00 (NZ) New Zealand Feb Non-Resident Bond Holdings: No est v 61.0% prior.

– 23:30 (JP) Japan to sell 12-Month Bills.

– 23:35 (JP Japan to sell 20-Year JGB Bonds.