Ekonomické zprávy

Asian session review: the US dollar is showing positive dynamics

TimeCountryEventPeriodPrevious valueForecastActual
02:00ChinaRetail Sales y/y -1.8%3.5%3.5%
02:00ChinaIndustrial Production y/y 1.3%2.6%2.4%
02:00ChinaFixed Asset Investment 5.1%4.4%5.5%
07:45FranceCPI, m/mFebruary0.4%0.9%1%
07:45FranceCPI, y/yFebruary6%6.2%6.3%

During today's Asian trading, the US dollar rose moderately against major currencies, continuing yesterday's increase, which was helped by higher US bond yields, as well as easing concerns about the banking crisis and a large-scale Fed rate hike.

The US Dollar Currency Index (DXY), which tracks the dynamics of the dollar against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona) rose by 0.14% to 103.74.

The latest inflation data confirmed that price pressure in the US continued to decline last month, partly responding to the tightening of the Central Bank's policy, but remained well above the Fed's 2% inflation target, which indicates the need for additional rate hikes. Given the recent turmoil in the US banking sector, the most likely outcome of the Fed meeting next week now seems to be a smaller - by 25 basis points - rate increase. According to the CME FedWatch Tool, markets now see an 82.7% chance of a 25 basis point rate hike at the Fed's March meeting and only a 17.3% chance that rates will remain at current levels.

Today, investors will focus on US data on producer prices and the retail sales report for February. Retail sales beat expectations at the start of the year, rising 3% in January after declining for three of the previous four months. The data points to consumer resilience and the risk of rising spending in the first quarter of 2023. Despite the fact that sales in January were generally high, the effect of a low base seems to have been the reason for such rapid growth. That is, retail spending fell both in November and December. Compared to October, the total volume of retail sales in January increased by only 0.7%. An analysis of recent monthly volatility shows that sales growth has slowed in recent months compared to the breakneck pace at the beginning of 2022. Nevertheless, retail sales data for January still pose some risk of raising forecasts for consumer spending for the first quarter. The retail sales report for February will show whether the January surge was a one-time anomaly or the beginning of another period of consumer spending sustainability. According to forecasts, retail sales fell by 0.3% in February after rising by 3% in January.

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