What you need to know before markets open
- The OECD expects the global growth to accelerate in the 2018-2019 period with the UK being the lagger among G20 nations.
- The US President blocked Broadcom's $117 billion acquisition of Qualcomm sending another message of protectionism to the world after last week’s trade tariffs implementation.
- The UK Finance Minister Philip Hammond is expected to deliver a brighter outlook for the UK growth and public finances while delivering Spring Budget statement in parliament. For details read my Preview here.
- The US inflation is due on Tuesday and given the Federal Reserve’s dual mandate on employment and price stability it is the most important macro piece together with NFP labor market report in the US. While Fed has been justifying the interest rate hikes by inflation and the economic growth projections, many Fed officials raised concerns about the inflation puzzle. Signs of the inflation decelerating is having a negative impact on prospects for rate hikes and it is US Dollar negative.
Tuesday’s market moving events
- The UK Spring Budget statement is expected to deliver upward estimate for both GDP and public finances. For details read my Preview here.
- The US core inflation is expected to rise 1.8% y/y in February, at the unchanged pace from January. The overhead inflation in the US is expected to accelerate to 2.2% y/y in February.
- The Bank of Canada Governor Stephen Poloz is scheduled to speak about a "Today’s Labour Market and the Future of Work" at Queen’s University, in Ontario at 3:30 GMT with the text of the speech available 15 minutes before the speech.
- The Bank of Japan meeting minutes will be released 10 minutes before midnight GMT.
Major market movers
- Moritomo scandal is still weighing on Japanese Yen sending it down 0.7% to 107.15 against the US Dollar.
- Major currency pairs are stagnant before the US inflation data that coincide with the UK Chancellor of Exchequer presenting Spring Budget statement in the UK parliament.
Earlier in Asia/Europe
- French non-farm payroll rose 0.4% Q/Q in the final quarter of 2017.
- Spanish inflation rose 0.1% m/m while rising 1.1% y/y in February.
- Small business optimism index rose to 107.6 in February, the survey from the NFIB showed, reflecting the rising confidence in the US economy.
- The OECD economic projections were revised upwards with the pace of expansion over the 2018-19 period expected to be faster than in 2017, but tensions are appearing that could threaten strong and sustainable medium-term growth. The UK is expected to see the slowest growth rate among G20 in 2018/2019.
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