Following the higher-than-expected CPI inflation reading from the United States, bond yields rose sharply from 4.35% to 4.6%, thus reaching a five-month high. This means that expectations for the first US interest rate cut have moved from June to September. This raises the question of who will cut interest rates first - the European Central Bank or the US Fed? In the coming week, on Wednesday we will learn the final CPI inflation readings from the UK and the Eurozone. On Thursday, new unemployment claims data from the United States will be published. We also continue with the start of the financial results season for the first quarter of this year.
Spis treści:
- UK consumer price index (CPI) annualised (March)
- Eurozone consumer price index (CPI) annualised (March)
- Initial Jobless Claims in the United States
- Stocks to watch
Wednesday, 17.04, 8:00 CET, UK consumer price index (CPI) annualised (March)
The CPI monitors changes in the prices of consumer goods and services. The CPI is an important indicator because it helps us to understand trends in consumers' purchases and the impact of inflation on their purchasing power. It is calculated on the basis of a basket representing typical consumer spending, covering various categories such as food, housing, transport, etc. Regular measurements of the CPI allow us to track how the prices of these products and services change over time. A positive CPI indicates an overall increase in the prices of goods and services.
On the other hand, a negative CPI means that prices are lower than the year before. It is an important tool for economists and policymakers to help them understand the impact of inflation on the economy and take appropriate action. For consumers, it is information about how their money is losing value in the context of rising or falling prices, allowing them to adjust spending, plan savings and make financial decisions.
In February 2024, the UK inflation rate fell from 4 (the level recorded in January and December) to 3.4% on an annualised basis. The strong fall in the rate of price rises in restaurants and hotels was the biggest contributor to the fall in inflation. Another factor having a positive impact on inflation was the 0.7% fall in energy and gas prices. Core inflation, which excludes volatile items such as energy and food, fell to 4.5%, reaching its lowest level since January 2022.
Analysts' current forecast is for CPI inflation to continue its decline in March to 3.1%.
Source: Tradingeconomics.com
A higher-than-expected reading could have a bullish impact on GBP, while a lower-than-expected reading could be bearish for GBP.
Impact: GBP
Wednesday, 17.04, 11:00 CET, Eurozone consumer price index (CPI) annualised (March)
According to preliminary readings, CPI inflation in the euro area fell to 2.4% in March 2024, the lowest level in 28 months, recorded in November. Core inflation, which excludes food and energy prices, also fell to 2.9%, the lowest level since February 2022, below the forecast of 3.0%. Energy prices fell by 1.8%, while inflation for food, alcohol, tobacco and non-energy industrial goods eased. Services inflation remained stable at 4.0%.
The current analyst forecast is to confirm the preliminary CPI inflation reading of 2.4%.
Source: Tradingeconomics.com
A higher-than-expected reading could have a bullish impact on the EUR, while a lower-than-expected reading could be bearish for the EUR.
Impact: EUR
Thursday, 18.04, 14:30 CET, Initial Jobless Claims in the United States
From the March 2024 employment report, we learned that total nonfarm employment in the US increased by 303,000 jobs and the unemployment rate held steady at 3.8%, still at multi-year lows.
The current analysts' forecast is for unemployment claims to remain currently low at 212 000.
Source: Tradingeconomics.com
A higher-than-expected number of applications could be bearish for the USD, while a lower-than-expected interest rate could act bullishly on the USD.
Impact: USD
Stocks to watch
Goldman Sachs (GS) announces financial results for the quarter ending March 2024. forecast EPS: 8.8. positive earnings surprise in 7 of last 10 reports. Deadline: Monday, 15 April.
ASML ADR (ASML) announces financial results for the quarter ending March 2024. forecast EPS: 3.27. positive earnings surprise in 9 of last 10 reports.
Deadline: Wednesday, 17 April.
Netflix (NFLX) announces financial results for the quarter ending March 2024. forecast EPS: 4.49. positive earnings surprise in 8 of last 10 reports.
Deadline: Thursday, April 18.
Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71,48% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
