In today’s briefing:
- EUR-flation Watch: April is hot (in inflation terms)
- Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 26 Apr 2024
- HEW: Hawks Fly Into the Fed Meeting
- Ifo Nugget: Confirmed.. The only inflation you’ll get in Germany is supply driven
- Japan Policy Rate 0.0% (consensus 0.0%) in Apr-24
EUR-flation Watch: April is hot (in inflation terms)
- Welcome to our now-cast series on EUR-flation.
- We have been banging the drum on dovish surprises in the Euro area for a while, but there are signs of upside risks in April inflation numbers from our price observations made through the month.
- Especially German inflation could surprise on the sticky/high side of consensus.Our overall now-cast projections lean around 0.1%-points above consensus for April.
Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 26 Apr 2024
- Indonesia raises interest rates unexpectedly, citing currency weakness.
- Japan faces continued yen depreciation amid low interest rates.
- China’s economic indicators show mixed signals, with GDP growth but weak money supply growth.
HEW: Hawks Fly Into the Fed Meeting
- This week’s data releases have increased hawkish pressures, despite disappointing US PMI results. High inflation is impacting real demand, with delayed Fed cuts leading to speculation of BOJ intervention and a rate hike in Indonesia.
- The Federal Reserve is expected to maintain rates in its upcoming meeting, with indications that the next move will likely be a rate cut. However, it is deemed appropriate to wait longer before implementing this.
- Consensus expectations are for Euro area inflation to remain steady at 2.4% in the April flash.
Ifo Nugget: Confirmed.. The only inflation you’ll get in Germany is supply driven
- We’ll start by addressing the title of this month’s Ifo nugget.
- We note from our two main models for predicting demand driven price pressures that wage pressures are continuing to fade and last month’s uptick in the employment barometer has faded again and we are still looking at wages and salaries in the pre Covid range and the other side of the Summer.
- The same is likely true for Core CPI in Germany.
Japan Policy Rate 0.0% (consensus 0.0%) in Apr-24
- The BOJ has maintained its policy rate at 0.0-0.1%, consistent with market expectations, reflecting ongoing economic recovery with moderate inflation, set against a backdrop of global economic uncertainty.
- Future interest rate decisions will be influenced by global economic conditions, domestic economic performance, inflation trends, and financial market stability, with a vigilant approach towards any necessary adjustments to maintain economic growth and price stability.
- The central bank projects that the economy will continue to grow modestly above its potential. It expects CPI inflation to stabilize around 2% by fiscal 2025 and 2026, supported by government measures and favourable financial conditions.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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