Euro area annual inflation down to 8.5% y/y in February (8.3% y/y forecast) vs. 8.6% y/y in January; core CPI rose by 5.6% y/y vs. 5.3% forecast/previous
Relief came when FOMC voting member Raphael Bostic spilled that the Fed could pause its rate hikes as soon as mid or late summer this year, correlating with a turn in U.S. Treasury yields while other risk assets turned higher.
U.K. and the European Union leaders made a new deal that would tackle trade and political disruption in Northern Ireland after Brexit
Incoming BOJ Governor Kazuo Ueda and BOJ Deputy Governor Shinichi Uchida show support for “Abenomics,” says central banks must remain “on guard” against low inflation as cost-push factors do not last long.
Japan’s au Jibun Bank manufacturing PMI adjusted higher from 47.4 to 47.7 in February but still lower than January’s 48.9 reading
Tokyo’s core inflation slows from 42-year high of 4.3% y/y to 3.3% in February, closer to BOJ’s 2% target
RBNZ Gov. Orr: We need to bring inflation back to target range “over a reasonable horizon” to not “unnecessarily crash the economy and turn temporary, slower growth into permanent unemployment.”
More Fed speak:
- Philip Jefferson says services inflation remains “stubbornly high,” but slowing wage growth may helps soften high inflation conditions
- Kashkari and Bostic suggested on Wednesday that aggressive interest rate hikes and maintaining rates high for a while may be needed to reduce inflation
Overlay of EUR Pairs: 1-Hour Forex Chart
BOE Gov. Bailey cautions against suggesting that the central bank is done with rate hikes or needs to do more
U.S. CB consumer confidence unexpectedly fell from 106.0 to 102.9 in January on sticky inflation and high interest rate expectations
Dollar, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay 1-Hour by TradingView
Markets started the week by bargain-hunting after the previous week’s selloff led European and U.S. equities to their worst week so far this year. End-of-month profit-taking may have also added to the pro-risk, anti-USD sentiment that played out during the Monday U.S. session.
Several ECB officials commented this week on how they’re winning the inflation fight but the ECB will stay aggressive with rate hikes until it is certain price growth will return to 2%.
Eurozone Manufacturing PMI for February: 48.5 vs. 48.8 in January; Services PMI rose to 52.7 in February (an 8-month high)
Japan’s retail sales popped 6.3% higher y/y vs. projected 4.2% gain and previous 3.8% reading
Japan’s unemployment rate unexpectedly dipped from 2.5% to 2.4%, the lowest reading since February 2020
منبع: https://www.babypips.com/news/weekly-forex-market-recap-2023-03-03
Eurozone Services PMI rose to 52.7 in February (an 8-month high) vs. 50.8 in January; cost pressures ebbed in manufacturing sector but rose substantially in services sector
China’s official manufacturing PMI jumped from 50.1 to 52.6 in February, the fastest expansionary pace since April 2012, while the services PMI improved from 56.3 to 54.4 after Beijing withdrew its zero-COVID policies
Friday’s price action looked like a continuation of Thursday’s, actually even accelerating in its risk-on lean as bond yields continued to fall. This arguably was catalyzed by a big dip in the Eurozone producer prices index and another round of net contractionary global business sentiment data, toning down the recent strengthening of the “higher-for-longer interest rates” narrative that is currently dominating broad market sentiment.
Building permits decline by another 1.5% m/m after a 7.2% drop in December
Expectations of higher interest rates from major central banks carried over to Thursday trading when the benchmark 10-year U.S. Treasury yields hit new intraweek high above 4%–the highest since November! It also didn’t help that U.S. initial jobless claims and labor productivity data reflected a tight enough labor market to support further rate hikes.
U.S. initial jobless claims, a proxy for layoffs, dipped from 192K to 190K last week and supported a strong labor market.
GBP Pairs
U.S. Manufacturing PMI for February: 47.3 vs. 46.9 in January; new orders continue to fall; “Input prices faced by manufacturing firms increased at a sharp pace”
Stronger than expected Australian data (private sector credit, retail sales) keep pressure on RBA to keep hiking rates
Christine Lagarde, president of the European Central Bank, said on Thursday that interest rates may need to continue higher after the anticipated 50 bps adjustment in two weeks.
Overlay of AUD Pairs: 1-Hour Forex Chart
New Zealand overseas trade index rebounded by 1.8% q/q in Q4 after previous 3.9% slide instead of decreasing by the estimated 1.7%, exports up 20% from previous period
A jump in risk-taking started NZD’s intraweek uptrend and made it a good candidate for bulls who were looking to price in China’s better-than-expected business activity reports.
Overlay of Inverted JPY Pairs: 1-Hour Forex Chart
British and the European Union leaders made a new deal that would tackle trade and political disruption in Northern Ireland after Brexit
Chicago PMI fell by 0.7 points in February to 43.6; employment sub-index fell 4.7 into contractive territory
Thanks to a heavy economic calendar, it was a very busy week for forex traders who had to balance global business surveys, economic data updates and lots of central bank speak. It’s no surprise that we saw choppiness and a less tight correlation from the usual intermarket price patterns.
