Next week’s economic events include the US CPI, the Bank of Canada rate decision, US University of Michigan Consumer Sentiment, UK GDP, and Norwegian CPI.
Monday features the Eurogroup Meeting, Norwegian CPI for February, EZ Sentix Index for March, and Japanese GDP for Q4. Tuesday will see the EIA STEO report released.
Midweek Economic Developments
On Wednesday, a 25% US tariff on steel and aluminium imports takes effect alongside the BoC announcement and US CPI data. The BoC is likely to cut rates by 25bps, with a focus on US tariffs’ impact on the Canadian economy.
Analysts expect US CPI to rise by 0.3% in February, with core rates at the same increase. The PPI is similarly forecasted to rise by 0.3%. Price data shows a recent uptick, linked to tariff-related price hikes, influencing the Fed’s outlook on inflation.
Friday will provide the UK GDP estimate for January, anticipated at 0.2%, down from 0.4% in December. The release may precede any shifts in BoE policy expectations, depending on inflation dynamics.
The University of Michigan survey, also on Friday, will gauge consumer sentiment and inflation expectations. Recent estimates show potential GDP decline for Q1, with inflation data closely monitored by Fed officials.
Key Themes And Market Reactions
The forthcoming week presents a collection of economic reports that demand careful attention, particularly for those dealing in derivatives. The focus will be on inflation data, monetary policy decisions, and broader economic health measures.
Monday’s agenda includes a gathering of Eurozone finance ministers, a fresh look at Norwegian inflation figures, investor sentiment across the Eurozone, and Japan’s final growth numbers for the last quarter of 2023. While none of these are likely to move markets substantially on their own, deviations from expectations could set the tone for the days ahead.
Tuesday’s calendar is comparatively light, with the US Energy Information Administration set to release its Short-Term Energy Outlook. Since energy prices have played a central role in inflation developments, particularly in recent months, updated projections could prompt reassessments of future price pressures.
By midweek, the outlook intensifies. A new 25% tariff on steel and aluminium imports into the US comes into force just as the Bank of Canada announces its latest decision on interest rates. Most analysts anticipate a 25-basis-point reduction, which would bring borrowing costs lower and reflect policymakers’ concerns over economic resilience in the face of external pressures. Traders should be mindful of whether officials signal further reductions to come.
Coinciding with the Canadian decision, fresh US inflation data will attract careful analysis. A monthly rise of 0.3% in both headline and core consumer prices is widely expected, maintaining the same pace as the previous reading. If figures deviate from forecasts, reactions across financial markets could be swift, influencing Federal Reserve expectations. Producer prices, also expected to rise at a similar rate, will further contribute to discussions around input costs filtering into consumer inflation.
To close the week, the UK’s economic performance enters focus. Growth for January is likely to show a 0.2% rise, a moderation from December’s 0.4%. While not an outright cause for concern, a slowdown would reinforce the need to monitor domestic demand and inflationary pressures ahead of the Bank of England’s next move.
Simultaneously, the University of Michigan’s consumer sentiment index will provide insight into how American households view future economic conditions. This indicator is particularly relevant given the expected slowdown in growth early in the year. Inflation expectations within the report may carry weight for central bank policymakers trying to balance price stability with economic momentum.
Clear price trends and policy shifts may emerge over the coming days, with direct effects on rate expectations and broader asset pricing. Inflation remains the dominant issue across key economies, and updates will clarify how decision-makers are likely to respond.
