Powell Assures Rate Cut, but Will Next Week’s CPI Report Disrupt the Strategy?

Tuesday, 12 March 2024, 14:30 – U.S CPI (YoY) (Feb)

In January, the annual rate of inflation dropped less than expected to 3.1% from 3.4% in December. Numerous economists and Federal Reserve officials have cautioned that the final push to bring inflation back to the bank target of 2% would be a challenge. While Fed Chairman Powell recently hints at the possibility of a rate cut, he also emphasizes that progress in combating inflation is uncertain. The upcoming data would offer additional insights into the inflation situation.

Wednesday, 28 Feb, 15:30 – UK GDP (MoM) (Jan)

In December, the United Kingdom officially entered a recession, with the GDP contracting by 0.3% to -0.1% in the last quarter of 2023. These statistics affirm the ongoing trend of prolonged economic stagnation in the U.K. Nonetheless, the recently unveiled 2024 budget statement holds the potential to breathe new life into the economy, marking a rebound from the recession. Investors are eagerly awaiting the data release for additional confirmation, especially since Chancellor of the Exchequer Jeremy Hunt has announced that the Office for Business Responsibility (OBR) raised its growth forecasts for Gross Domestic Product (GDP) in 2024.

Thursday,14 March 2024, 14:30 – U.S Initial Jobless Claims

In the week ending March 2, the number of Americans filing new claims for unemployment benefits was unchanged last week as the labor market continued to gradually ease, which could give the Federal Reserve room to wait before cutting interest rates this year. Although the levels continue to be historically low, the previous outcomes suggest that the U.S. labor market is experiencing some weakening, a trend attributed to the extended period of restrictive monetary policy by the Fed. A subsequent rise in forthcoming data would confirm the trend.

Friday, 1 March 2024, 17:00 – US ISM Manufacturing PMI (Feb)

The U.S. service sector marked its 12th consecutive month of expansion in January, with the PMI reading of 52.5, slightly below the forecasted 52.9. While there was robust new business growth, service providers opted for competitive pricing, resulting in the slowest inflation rate since June 2020. Despite that, new business and future activity are likely to expand further following a notable increase in new export orders across the globe according to the latest S&P survey.