March 11 Week Ahead: CPI, Retail, GDP & More

The week of March 11 has arrived and has brought with it a variety of financial and economic events that may interest traders and investors alike.

Here are this week’s main economic events and updates from the US, the UK, China, and Japan:

US CPI & Retail Data: Are Fed Rate Cuts on the Horizon?

The US Consumer Price Index (CPI), which is a widely used gauge of inflation and deflation, is set to be released on Tuesday, March 12. 

CPI is often followed by the Federal Reserve and can, therefore, affect this central bank’s monetary policy decisions. Generally speaking, when CPI is high, it indicates hotter inflation rates, which, in turn, can lead to the Fed adopting a more hawkish rate hiking policy to combat it. 

Tuesday’s CPI report is expected to reflect US inflation rates in February with core CPI (which excludes fuel and food prices) projected to rise 0.3% compared to January’s 0.4%. Furthermore, CPI is expected to rise 3.7% from the previous year, hence marking its “smallest annual advance since April 2021.” 

For a while now, many have been expecting the Fed to cut rates as they hope that inflation nears the Fed’s target range. While it is yet to be determined whether or not the Fed will adhere to the expectations, Fed Chair, Jerome Powell, recently stated that rate cuts would happen “at some point this year.”

Besides Tuesday’s report, traders and consumers may want to keep tabs on US retail sales data which are scheduled to be released on Thursday. The data will reflect the health of the US retail sector in February and is expected to show a rebound of 0.8% following a drop in January.

Whatever the results are, it would be interesting to see how it will affect the upcoming Fed meeting on March 19-20. (Source: Federal Reserve)

UK Jobs Report & GDP: How Is the UK’s Economy Faring?

This week is an important one for the UK’s economy as well since the country’s jobs report and Gross Domestic Product (GDP) are expected to be released on Tuesday and Wednesday respectively. 

The release may be of interest to both traders and Bank of England members as it can provide valuable information about the state of the UK’s job market, hence reflecting the country’s economic health.

Despite the UK entering a technical recession, the data is expected to show that regular pay growth in the three months leading up to January is at a high of 6.2% and that the UK’s economy has rebounded in January. Additionally, unemployment is expected to show a drop. 

As for Wednesday's GDP report, the projections point toward a 0.2% MoM expansion in January which may be welcome news to many given December’s 0.1% contraction. According to some market analysts, the report may show that the UK may be distancing itself from last year’s recession. However, only time will tell what the results will be.

Asian Economic Updates: China’s PBoC & Japan’s Rengo Tally 

Friday is set to provide a helpful economic picture of Asia’s largest economies, China and Japan. 

The Japanese Rengo Trade Union Confederation, which is Japan’s biggest union federation, is expected to conduct wage negotiations. According to expectations, Rengo is projected to demand an increase of 5.58%, the first increase over 5% in about 30 years.

The demands, according to Rengo’s President Yoshino, come in response to inflation and underwhelming earnings reports. These figures can have an impact on the Bank of Japan’s (BoJ) meeting on March 18-19.

As for China, the People’s Bank of China (PBoC) is scheduled to conduct its Medium-term Lending Facility (MLF). The operation is expected to remain at a 1-year MLF rate. It will be worth seeing what will be revealed about these two leading Asian economies.

Conclusion

This week could be helpful to those seeking to understand the global economies better as we head deeper into 2024. As such, traders, investors, and consumers may want to track this week’s results and any news to come.