Consumer Price Index Takes Centre Stage

13 March, 2018

At 11:30 GMT, the UK Budget Report will be released. This is a mini-budget and outlines the government’s updated budget for the fiscal year, including infrastructure and spending projections, public finance forecasts and potential tax reforms. It is likely that the data will reveal an improvement in the public finances. Analysts will look to the assessment of productivity growth, which was cut in November, the state of the public finances and news on tax reform. GBP may be affected by this report.

At 12:30 GMT, US Consumer Price Index (YoY) (Feb) data will be released, with an expected reading of 2.2% against 2.1% previously. Consumer Price Index Ex Food & Energy (YoY) (Feb) data will be released and is expected to be unchanged at 1.8%. Consumer Price Index Ex Food & Energy (MoM) (Feb) data will be released, with an expected reading of 0.2%, against 0.3% previously. Consumer Price Index (MoM) (Feb) data will be released, with an expected reading of 0.2%, against 0.5% previously. These data points will provide an updated measure of the effect of inflation on consumers. Inflation is one of the main drivers of market sentiment in the US currently. The expectation is for an increase in consumer prices year-on-year but for the monthly reading to show a drop. The higher reading shocked the market in January but can be partly explained as an increase in demand for winter items due to the cold weather. If this is the case, the February number should show a correction. USD pairs and US assets could experience a pickup in volatility due to this data.

At 14:30 GMT, Bank of Canada Governor Poloz will give a speech titled “Today’s Labour Market and the Future of Work” at Queen’s University, in Ontario. CAD pairs could be moved by comments made during the speech or by answers given to audience questions afterwards.

At 23:50 GMT, BOJ Monetary Policy Meeting Minutes will be released, providing key insights into how the decisions made by the Board were influenced by economic conditions. JPY crosses may experience volatility as a result.


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