US OUTLOOK/OPINION: CPI/PPI Reports Swing Into View Next Week
- Growth concerns of US trade and broader economic policy have taken precedence in recent weeks although next week sees inflation in focus with the February CPI and PPI reports.
- Last month’s January release saw a strong CPI release build on the solid payrolls report (including revisions) to at one point price only a single 25bp cut from the Fed this year before softer core PCE implications from the PPI report took the edge off the hawkish reaction. Bloomberg consensus currently sees core CPI at a seasonally adjusted 0.3% M/M after a strong 0.45% M/M in January. Core services ex housing will no doubt be watched closely after it surged 0.76% M/M in January.
- The details within both the CPI and PPI reports are going to be key as always though, considering core PCE printed ‘only’ 0.285% M/M in January.
- Fed Chair Powell on Friday afternoon: “We do not need to be in a hurry, and are well positioned to wait for greater clarity.” The FOMC is now in media blackout ahead of the Mar 18-19 meeting.
We repeat the Fed’s Beige Book from March 5 in its entirety being its first update of anecdotal evidence under the second Trump administration: “Prices increased moderately in most Districts, but several Districts reported an uptick in the pace of increase relative to the previous reporting period. Input price pressures were generally greater than sales price pressures, particularly in manufacturing and construction. Many Districts noted that higher prices for eggs and other food ingredients were impacting food processors and restaurants. Reports of substantial increases in insurance and freight transportation costs were also widespread. Firms in multiple Districts noted difficulty passing input costs on to customers. However, contacts in most Districts expected potential tariffs on inputs would lead them to raise prices, with isolated reports of firms raising prices preemptively.”
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USDCAD TECHS: Approaching Key Support
- RES 4: 1.5000 Psychological round number
- RES 3: 1.4948 High Mar 2003
- RES 2: 1.4814 High Apr 2003
- RES 1: 1.4600/1.4793 Round number resistance / High Feb 3
- PRICE: 1.4296 @ 16:16 GMT Feb 5
- SUP 1: 1.4270 Low Feb 5
- SUP 2: 1.4261 Low Jan 20 and a key support
- SUP 3: 1.4178 High Nov 6 ‘24
- SUP 4: 1.4120 Low Dec 11
The reversal in USDCAD from Monday’s high extended again Wednesday. For now, a move down is considered corrective and the primary uptrend remains intact. Monday’s cycle high, reinforces and strengthens bullish conditions. The break higher confirmed a resumption of the uptrend and opens 1.4814 next, the Apr 2003 high. Key support to watch lies at 1.4261, the Jan 20 low. A clear breach of this level would signal a reversal.
ASIA: Coming Up In The Asian Session On Thursday
| 2300GMT | 0700HKT | 1000AEDT | South Korea Dec BoP Current Account Balance |
| 0100GMT | 0900HKT | 1200AEDT | Philippines Dec Unemployment Rate |
| 0330GMT | 1130HKT | 1430AEDT | Thailand Jan CPI |
ASIA: Coming Up In The Asia-Pac Session On Thursday
| 2300GMT | 0700HKT | 1000AEDT | South Korea Dec BoP Current Account Balance |
| 2350GMT | 0750HKT | 1050AEDT | Japan Jan Investor Flows |
| 0030GMT | 0830HKT | 1130AEDT | US Fed's Jefferson Gives Lecture |
| 0030GMT | 0830HKT | 1130AEDT | Australia Dec Trade Balance |
| 0130GMT | 0930HKT | 1230AEDT | Japan BOJ Board Tamura Speech in Nagano |
| 0200GMT | 1000HKT | 1300AEDT | Japan Jan Tokyo Avg Office Vacancies |
| 0330GMT | 1130HKT | 1430AEDT | Japan to Sell 3.5 Trillion Yen of 6-Month Bills |
| 0335GMT | 1135HKT | 1435AEDT | Japan to Sell 30-Year Bonds |
