Daily Digest:
w/c 4 March 2024: US stock averages higher again to end the week, prodding at record levels; upcoming week's focus on the Fed's Powell testimony before Congress and the US Employment report

Hot US CPI Sets “Risk Off” Theme; Fed in Focus in Busy Week for CBs

Intermediate

Macroeconomic/ geopolitical developments

  • The dominant event last week was the far higher than expected release for the US Consumer Price Index (CPI) data on Wednesday.
August 2022 US CPI
  • Headline CPI rose 8.3% YoY ended August against expectations of an 8.1% rise.
  • Core inflation (CPI excluding food and energy) leapt to its highest level since March at 6.3%, higher than the consensus of 6.1%.
  • The European Commission (EC) proposed raising up to EUR 140 billion to ease the impact of surging energy costs, including a cap on revenue of non-gas power producers, a windfall tax on fossil fuel company earnings, and reduced month electricity demand at peak times.

Global financial market developments

  • The major US stock averages posted notable losses last week, with the S&P 500 posting its largest weekly drop since mid-June.
  • European and Asian equity indices were also significantly lower.
  • US 10yr yields moved notably higher, close to the June yield peak.
  • US Dollar strength is renewing, DXY back eyeing the recent peak.
  • GBPUSD hit a new multi-decade low, the lowest level since 1985!
  • Gold hit new multi-month lows.
  • Oil consolidated near new multi-month low, with bigger risks still skewed lower.
  • Copper has consolidated the recent bounce, for a neutral tone.

Key this week

  • Central Bank Watch: A super busy week for Central Banks, but with all eyes on the Federal Reserve Open Market Committee (FOMC) decision, statement and press conference on Wednesday. The People’s Bank of China (PBoC) interest rate decision is on Tuesday, and we also get the Reserve Bank of Australia (RBA) Meeting Minutes that day. Thursday brings both the Bank of Japan (BoJ) interest rate decision, statement and press conference, plus the Bank of England (BoE) interest rate decision, summary and minutes.
Fed
  • Macroeconomic data: UK markets are closed on Monday for the Queen’s funeral. A quiet week for data with the main event for the week being Friday’s release by S&P Global of the global Flash Purchasing Managers Index (PMI) data.
Queen Elisabeth II
DateKey Macroeconomic Events
19/09/22No data of note; UK markets are closed for the Queen’s funeral
20/09/22PBoC interest rate decision; RBA Meeting Minutes; Canada CPI
21/09/22FOMC interest rate decision, statement and press conference
22/09/22BoJ and BoE interest rate decisions, statements and press conferences
23/09/22Global Flash PMI from S&P Global

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued

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