KHDA announces private school fees for next year

The KHDA has announced that private schools in Dubai will be able to raise their fees for the next academic year from a baseline of 2.6% up to a maximum of 5.2%, depending on any changes to their grading over the past year. This compares with a baseline of 3.0% and a maximum of 6.0% last year, so the inflationary pressure from education – which makes up 8.2% of the basket and has been running at around 3.5% y/y – could soften, helping bring down the headline inflation level.

In the US, job openings surprised to the upside at 8.76mn in February according to the latest JOLTs data, higher than the predicted 8.73mn. With ADP and NFP labour market data due today and Friday, more strong employment prints will likely see bets on a rate cut from the Fed pared further. Meanwhile, factory orders rose 1.4% m/m in February, beating the predicted 1.0% gain and up from a 3.8% contraction in January. Stripping out volatile transport, orders were up 1.1% m/m.

German CPI inflation was 2.3% y/y in March, down from 2.7% in February and slower than the predicted 2.4%. Prices were up 0.6% m/m, slower than the predicted 0.7%. This follows on from lower than expected inflation prints from France, and raises the prospect of a June cut from the ECB.

Today’s Economic Data and Events

11:00 Turkey CPI inflation, March, % y/y. Forecast: 69.1%

16:15 US ADP employment change, March. Forecast: 150,000

OPEC review meeting

Fixed Income

• USTs were somewhat mixed yesterday as the 2yr yield fell 2bps to 4.6888%, while the 10yr yield closed 4bps higher at 4.3491%.
• Presidents of the San Francisco and Cleveland Feds, Mary Daly and Loretta Mester said yesterday that they still expect the FOMC to cut rates three times this year, although they are in no rush to start that process. Jerome Powell was due to speak later.

FX

• The dollar index closed down 0.2% against its basket of peers yesterday with most of the majors reporting gains against the greenback save CHF which closed down 0.4%. The currency hit a five-month low against the dollar yesterday as monetary policy loosens.
• The commodity currencies were notable gainers, with AUD adding 0.5% and NZD 0.3%, although CAD was weaker as it closed up by less than 0.1%. Sterling closed up 0.2% at 1.2578.

Equities

• The strong JOLTS data weighed on equity markets yesterday, and in the US, the S&P 500 closed down 0.7%, while both the Dow Jones and the NASDAQ ended the day 1.0% lower.
• There was a similar story in Europe where the composite STOXX 600 lost 0.8%. The DAX fell 1.1% and the FTSE 100 by a lesser 0.2%.

Commodities

• There were strong gains in oil markets yesterday, with a 1.7% rise in prices for both Brent futures and WTI, taking them to USD 88.9/b and USD 85.2/b at the close respectively.
• The catalyst was a sizeable 2.3mn bbl fall in US crude inventories last week, according to data from the API. Gasoline and distillate inventories also fell.
• OPEC is due to hold its review later today; no change to policy is anticipated in the near term.