FED: Williams - Longer Than Expected Lag To Inflation Expectations
Mar-07 15:52
NY Fed's Williams (permanent voter, dove) with another more academic speech for this event on monetary policy transmission following Bowman's a little earlier. Full speech here and presentation slides here.
- "In all cases, there is a lag of about eight months before the shock affects inflation expectations. This is surprising since inflation expectations are forward-looking and should move soon after a surprise,"
- He said his analysis also shows there was no sign of inflation expectations becoming unmoored at any forecast horizon in recent years relative to the pre-pandemic period.
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SWEDEN: January Flash CPI Due 0700GMT/0800CET Tomorrow
Feb-05 15:45
Swedish January flash inflation is due tomorrow at 0700GMT/0800CET. The Riksbank projected CPIF ex-energy at 2.4% Y/Y in the December MPR, but this is likely to be mechanically too high, given December inflation surprised two tenths to the downside at 2.0% Y/Y. As such, Bloomberg consensus sees CPIF ex-energy at 2.1% Y/Y.
- Consumption data for 2023 will once again be used to calculate 2025 basket weights (as in 2024), so analysts do not expect a large basket effect in January.
- Analysts generally expect start of year price resets in services (excluding rent) to be smaller than in 2024, while goods components are likely to see seasonal falls in prices.
- The Riksbank’s January meeting minutes continued to signal broad-based confidence in the inflation outlook. Deputy Governor Jansson and Governor Thedeen highlighted recent increases in producer prices as a risk to monitor, but that these developments do not yet change the assessment of monetary policy.
- As a result, we currently consider activity/labour market data and any US tariff developments to be a more important to the near-term Riksbank policy outlook.
- No details will be available in the flash release, with final CPI not due until Feb 18th. See below for a selection of analyst comments:
OPTIONS: Expiries for Feb06 NY cut 1000ET (Source DTCC)
Feb-05 15:33
- EUR/USD: $1.0250(E1.5bln), $1.0300(E1.0bln), $1.0315-25(E2.2bln), $1.0350-55(E1.1bln), $1.0370-80(E1.5bln), $1.0390-10(E2.8bln), $1.0430-50(E2.4bln), $1.0500(E1.2bln)
- USD/JPY: Y152.50($720mln), Y153.90($1.4bln)
- EUR/JPY: Y159.30(E878mln)
- GBP/USD: $1.2455(Gbp1.4bln), $1.2550(Gbp1.1bln)
- EUR/GBP: Gbp0.8465(E1.1bln)
- USD/CAD: C$1.4200($1.8bln)
- USD/CNY: Cny7.3000($524mln), Cny7.3550($648mln)
GILT AUCTION PREVIEW: On offer next week
Feb-05 15:31
The DMO has announced it will be looking to sell GBP1bln of the 0.625% Mar-45 linker (ISIN: GB00BMF9LH90) at its auction next Wednesday, February 12.
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