12 March 2024
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Markets watch for US CPI report

Monday was a quiet day for major data releases, so all eyes will be on the US today for the scheduled monthly CPI inflation data print. The headline reading is expected to come in at 3.1% y/y, steady on January’s level, while core inflation is predicted to slow to 3.7%, from 3.9% previously. The FOMC is now in its pre-March meeting blackout period so there will be no commentary from board members over the next 10 days, but there remains a high level of certainty that the March meeting will be a hold.

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Today’s Economic Data and Events

11:00 UK unemployment rate, %, 3 months to January. Forecast: 3.8%

16:00 India CPI inflation, % y/y, February. Forecast: 5.0%

16:30 US CPI inflation, % y/y, February. Forecast: 3.1%

Fixed Income

  • USTs traded lower yesterday as yields on the 10yr added 2bps to 4.0982%, while the 2yr yield added 6bps to 4.5350. In the UK, 10yr gilt yields closed 1bps lower at 3.971%.
  • Argentina made a surprise cut to its benchmark interest rate, taking it down from 100% to 80%.

FX

  • The US dollar index broke its losing streak yesterday as it closed up 0.2% against its basket of peers, after a run of six straight sessions down.
  • Sterling was a notable loser yesterday as it closed down 0.3% against the dollar, to 1.2814, though it remains near multi-month highs. Euro dropped 0.1% to 1.0926, while JPY added 0.1% to 146.95 as bets on imminent rate hiking continued to drive it higher.

Equities

  • Chinese equity markets started the week on the front foot as the Hang Seng closed up 1.4% yesterday, while on the mainland the Shanghai Composite added 0.7%. It was a different story in Japan, however, as the stronger yen in recent sessions has weighed on equity indices there. The Nikkei closed down 2.2%, slipping further from the all-time high hit a week earlier.
  • US equities had little concrete direction with no major data or developments yesterday. The S&P 500 and the NASDAQ closed down 0.1% and 0.4% respectively, while the Dow Jones added 0.1%.
  • Locally, the ADX closed flat while the DFM lost 0.1%.

Commodities

  • Oil prices were mixed at the start of the week, with Brent futures adding 0.2% to close at USD 82.21/b, while WTI closed down 0.1% to USD 77.93/b. Both benchmarks are trading up so far this morning.

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