Continuing Focus Upon Inflation Data
March 14, 2024
Several price data were released this Thursday even before the highly awaited U.S. PPI report.
The monthly increase of Spanish consumer prices in February got revised higher to 0.4% from 0.3% reported initially, by year-on-year CPI inflation remained unchanged at a 6-month low of 2.8%. Spanish inflation peaked in July 2022 at 10.8%.
Irish CPI inflation slowed 0.7 percentage points to a 30-month low in February of 3.4% versus its peak of 9.1% hit in October 2022.
CPI inflation in Bulgaria decelerated to 3.3% last month from 3.8% in January, 4.7% in December, 16.0% in February 2023 and a peak of 18.7% in September 2022.
Swedish consumer price inflation settled back to a 2-month low of 4.5% in February from 5.4% in January, 4.4% in December and a high of 12.3% in December 2022.
Wholesale price inflation in India fell to a 4-month low of 0.20% in February from 0.27% in January and last year’s low of -4.18% in June.
Switzerland’s combined producer price and import price index ticked 0.1% higher on month and posted a somewhat smaller 2.0% year-on-year drop of 2.0% after dropping 2.3% between January 2023 and January 2024. The January drop was the steepest 12-month decline in 37 months. Import prices in February were 5.4% lower than a year earlier, while domestic producer prices were 0.3% below their year-earlier level.
Cypriot producer prices sank 1.3% on month and 2.9% on year in January.
The U.S. February producer price data, like the U.S. CPI report on Tuesday, exceeded expectations. A 0.6% monthly advance was twice analyst forecasts and lifted the overall year-on-year PPI inflation rate by 0.6 percentage points to a 5-month high of 1.6%. A monthly leap of 4.4% in energy costs was the main cause of this upside surprise, followed by a 1.0% jump in the food component. Energy and food had been the dynamic duo in the early days of the 2021-22 spike in global inflation. Core U.S. PPI inflation meanwhile remained steady at 2.0%.
Disappointment over the U.S. PPI’s acceleration last month was also tempered by softer-than-expected retail sales, which rose by a less-than-forecast 0.6% in February after slumping 1.1% in January, which was a bigger drop than reported initially. Sales in December-February were 0.5% less than in the prior three months and up by just 2.1% nominally from a year earlier. Less torrid U.S. personal consumption going forward would strengthen the chances of U.S. inflation returning to target.
Authorities at the Central Bank of Uzbekistan again left its key interest rate at 14.0% after today’s scheduled monetary policy review. It’s been at that level for the past year, which happens to match the pandemic low from September 2020 through march 2022. CPI inflation in Uzbekistan slid to 8.35% last month from 8.77% at end-2023 and 12.3% in November 2022, but such continues to exceed the medium-term target of 5.0%.
Other data highlights from around the world today revealed
- A 16-month high in the house price index of the British Royal Institute of Chartered Surveyors.
- January factory output in South Africa outpaced expectations, rising 0.8% on month and 2.6% on year.
- Retail sales in Brazil rebounded 2.5% in January following a 1.3% slide in December and resulted in the largest 12-month rise (4.1%) in 21 months.
- Canadian manufacturers experienced a soft January, with sales edging up just 0.2% and new orders and inventories dropping by 1.3% and 0.2%, respectively.
- New U.S. jobless insurance claims stayed historically few last week at 209k, little different from the 210k claims total in the prior week.
Prior to the U.S. data releases this morning, the dollar and long-term interest rates, stock futures were up around 0.4%, and prices for gold and crypto had lost some ground. In subsequent trading, The dollar has strengthened and presently is showing gains of 0.3% against the euro and swissy and 0.2% versus the yen and sterling. Bitcoin is now down 1.4% on the day, and gold has lost 0.6%. The 10-year U.S. Treasury yield is six basis points above Wednesday’s closing level, outflanking increases of 3, 2, and one basis point in its German, British and Japanese counterparts.
Share prices closed in the Pacific Rim up 0.9% in South Korea, 0.5% in India and 0.3% in Japan but down 0.7% in Hong Kong and 0.2% in China and Australia. The U.S. reaction to the PPI report (Nasdaq +0.4%, DOW +0.2% and SPX -0.2%) has so far been muted.
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Central Bank of Uzbekistan, India WPI, Swiss PPI and import prices, U.S. PPI and retail sales
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