What are the key economic events for today? Here's a breakdown of the major releases and speakers you need to know about:
European Session
Swiss CPI: The annual inflation rate is expected to remain steady at 0.1%, according to market expectations. However, the Swiss National Bank (SNB) is unlikely to be swayed by this data, as they've emphasized a high threshold for negative interest rates. Even temporary negative inflation wouldn't be a cause for concern.
Eurozone Q4 GDP: The second estimate of Eurozone GDP growth for the fourth quarter is projected to show a quarterly increase of 0.3% and an annual growth rate of 1.3%. The European Central Bank (ECB) remains focused on inflation, so this data is unlikely to significantly impact their policy decisions.
American Session
- US CPI Report: The spotlight is on the US Consumer Price Index (CPI). The annual inflation rate is forecasted to slow slightly to 2.5%, down from the previous 2.7%. The monthly measure is expected to remain at 0.3%. Core CPI, excluding volatile food and energy prices, is projected to also slow to 2.5%, down from 2.6%.
The Federal Reserve's stance on the labor market's impact on inflation is crucial. With lower wage growth and higher productivity, the Fed might still consider rate cuts based solely on inflation easing. However, a CPI that meets or slightly misses expectations won't significantly alter market expectations for the two rate cuts predicted by the market.
- Market Reaction: If the CPI report aligns with forecasts or comes in slightly lower, the market might show a dovish response, particularly in the stock market, which is expected to benefit. Conversely, a stronger-than-expected CPI could trigger a hawkish reaction, leading to a US Dollar rally and potential new lows for precious metals. The stock market might also face short-term pressure in this scenario.
Central Bank Speakers
- 12:00 GMT/07:00 ET: BoE's Pill (hawkish - voter)
This is a crucial moment to watch for any hints about future monetary policy decisions from the Bank of England.
