On Tuesday, Australia will release the Westpac consumer sentiment, Japan will report household spending y/y, and the U.S. will publish JOLTS job openings.
Finally, on Friday, the U.K. will release GDP m/m, while in the U.S., the preliminary University of Michigan consumer sentiment and inflation expectations reports will be published.
In the last part of 2024 labor demand showed signs of stabilization despite a 500K drop in job openings in December, as job openings increased in Q4 overall.
No major decline is expected in this week's data, but economic policy uncertainty could put pressure on hiring and job-seeker activity, as firms and workers assess the impact of recent policy shifts before making decisions.
U.S. inflation ran hot in January, though not as strong as during the same period last year. A few categories registered price surges, including prescription drugs, used cars, motor vehicle insurance and recreation services. However, some of these have subsequently eased in February.
While some core goods prices are expected to ease, early inflationary effects from new tariffs on Chinese imports implemented at the start of February could offset these declines. Concerns over tariffs are already influencing pricing decisions, keeping consumer price inflation on a firm trajectory.
At this week's meeting, the BoC is expected to deliver a 25 bps rate cut, but there's also a strong possibility that it will keep rates on hold.
On the political front, former BoC and BoE governor Mark Carney won the Liberal Party's leadership race and will replace Justin Trudeau as Canada's prime minister. There is a high possibility that Carney will call for early federal elections.
The recently announced 25% U.S. tariffs on Canada and Mexico are already being rolled back, with USMCA-compliant trade exempted. While only 38% of Canadian exports utilized USMCA last year, this will likely increase and it should be possible to reach over 90% relatively quickly, RBC estimates. However, new U.S. tariffs on steel and aluminum are expected over the coming week, with broader reciprocal tariffs likely in April. The ongoing uncertainty surrounding U.S. trade policy remains high, posing challenges for Canadian business investment.
In conclusion, the BoC’s decision remains uncertain. Trade risks could weigh on the economic outlook, but strong fundamentals may justify keeping rates steady for now.
In the U.S., the consensus for the preliminary UoM consumer sentiment is 63.8, down from the previous 64.7. The prior reading for the preliminary UoM inflation expectations was 4.3%. These surveys are being closely watched by Fed policymakers as softening consumer sentiment fuels concerns about economic growth.
This article was written by Gina Constantin at www.forexlive.com. Read More Details
Finally We wish PressBee provided you with enough information of ( Market Outlook for the Week 10th - 14th March )
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