LATEST UPDATE: Upcoming: US Non-Farm Payrolls (NFP), European Central Bank (ECB) and Bank of Canada (BoC) interest rate announcements, along with Japanese wage information.

Swiss Consumer Price Index (CPI) for February, South Korean Gross Domestic Product (GDP) for the fourth quarter, and Japanese Tokyo Consumer Price Index (CPI) for February.

Tuesday: Primary Super Tuesday in the US, Final release of Chinese Caixin Services Purchasing Managers’ Index (PMI) for February, Final releases of Services and Composite PMI for February in the Eurozone (EZ), UK, and US, Producer Price Index (PPI) for January in the Eurozone, Institute for Supply Management (ISM) Services PMI for February in the US, Consumer Price Index (CPI) for February in South Korea.

Wednesday: Bank of Canada (BoC) Announcement, Gross Domestic Product (GDP) for the fourth quarter in Australia, Trade Balance for January in Germany.

Thursday: European Central Bank (ECB) Announcement, Japanese Wage Data, Trade Balance for February in China.

Friday: Industrial Output and Producer Price Index (PPI) for January in Germany, Revised Gross Domestic Product (GDP) for the fourth quarter in the Eurozone, Jobs Report for February in the US, Jobs Report for February in Canada.

Saturday: Inflation data for February in China.

Sunday: Gross Domestic Product (GDP) release in Japan (Revised).

Note: Previews are listed in chronological order by day.

China Two-Sessions (Monday/Tuesday):

China’s political leaders and lawmakers are set to convene for the country’s annual legislative sessions known as the “two-sessions.” During this event, budgets will be set, and Beijing’s plans for the economy, trade, diplomacy, and military will be outlined. Some anticipate a reassessment of economic strategies with a focus on stimulating domestic demand. Restoring confidence in China’s investability is crucial from a market perspective. Regulators are reportedly taking steps to stabilize the exchange rate to boost confidence in the Chinese currency and economy ahead of the meetings. Sentiment in Chinese stocks has been negative, prompting regulators to urge quant funds to cease a popular high-leverage strategy gradually. Analysts predict that this year’s event will likely focus on discussing how to pursue high-quality economic development and further boost confidence in the Chinese economy. ING analysts expect the Two Sessions to maintain various targets, including GDP growth around 5%, inflation around 3%, new urban employment around 12 million, urban unemployment rate around 5.5%, fiscal deficit around 3.5%, and special government bond issuance of 4 trillion.

February’s Consumer Price Index (CPI) figures are under increased scrutiny due to the inclusion of the latest rental price estimates. In January, there were expectations of inflationary pressure from rents, as mentioned by Jordan on January 23rd. However, the January CPI came in notably lower than forecast at 1.3%, compared to the expected and previous 1.7% (with the Swiss National Bank’s Q1 forecast at 1.8%). This unexpectedly low figure led to a significant dovish shift in market expectations, with the likelihood of a March interest rate cut increasing to over 50%, compared to around 25% before the release (currently at 60%). February’s CPI data will be closely analyzed to determine if January’s figure accurately reflects the pricing environment, considering that January tends to be a more volatile reporting period. Additionally, analysts will be looking for any signs of rental pressures. The last rental update in November saw a 1.1% quarter-on-quarter increase or 2.2% year-on-year increase, which was deemed acceptable and led to a dovish shift in market pricing ahead of the December meeting.

Tokyo Consumer Price Index (CPI) for February:

The upcoming release of Tokyo inflation data for February is viewed as a leading indicator for the national price trend. Market participants will be observing the data closely to ascertain whether there is a further slowdown, particularly after Core CPI in Japan’s capital city decreased for the third consecutive month in January, reaching its lowest level in nearly two years. In January, Tokyo inflation data came in softer than expected, with headline CPI at 1.6% versus an expected 2.0% (previous 2.4%), and CPI excluding Fresh Food at 1.6% versus an expected 1.9% (previous 2.1%). This marked the lowest readings since March 2022. Additionally, CPI excluding Fresh Food and Energy recorded its slowest pace of increase in 11 months at 3.1% versus an expected 3.4% (previous 3.5%). The softening in Tokyo inflation data was attributed to a decline in energy and utility costs, easing of accommodation price increases, and moderation in the pace of processed food price increases. Furthermore, national inflation data for Japan in January also showed a decline for the third consecutive month, reaching its lowest level in 22 months but was stronger than expected, matching the central bank’s price target with National Core CPI at 2.0% versus an expected 1.8% (previous 2.3%).

Super Tuesday is the busiest day in the pre-convention election calendar. For Democrats, the stakes are minimal as President Biden is expected to secure the nomination. However, for Republicans, the situation is less clear, with former President Trump facing opposition from Nikki Haley. Despite this, Trump holds a significant lead in the race, and Super Tuesday’s primaries are unlikely to change this. Attention will shift to Haley’s potential exit from the race (she committed to at least Super Tuesday) or Trump reaching the 1215 delegate threshold needed for the nomination, possibly as soon as March 12th. Currently, Trump has won 119 delegates compared to Haley’s 22.

US ISM Services PMI (Tuesday):

The headline is expected to slightly decrease to 53.3 in February from 53.4 in January. S&P Global’s flash PMI data for the month indicated a decline in US services business activity to a three-month low at 51.3 (from 52.5). Despite this, both manufacturing and services sectors are expanding again, accompanied by subdued price pressures.

UK Budget (Wednesday):

UK Chancellor Hunt’s spring budget will be in focus next week, with pressure to lower taxes to improve the Conservative party’s standing ahead of the general election. Economists anticipate a GBP 20 billion tax package, facilitated by lower borrowing levels since the Autumn Statement. Potential measures include a freeze in fuel duty, income tax reductions, and support for the housing market. However, any perceived lack of fiscal prudence could impact UK rates and, subsequently, monetary policy.

BoC Announcement (Wednesday):

The Bank of Canada is expected to maintain its policy interest rate at 5.00%, with analysts predicting the first rate cut possibly in June. While inflation has fallen within the target range, policymakers remain cautious, particularly regarding elevated shelter costs and a weakening Canadian dollar.

Australian GDP (Wednesday):

Australian GDP data for Q4 will provide insights into the economy’s health following mixed readings in Q3. The previous data showed weaker-than-expected economic growth, mainly attributed to declines in the mining and agriculture industries. Government spending supported growth, but GDP per capita declined for the third consecutive quarter.

ECB Announcement (Thursday):

The ECB is expected to keep rates unchanged, with markets focusing on inflation progress and economic growth. Recent data showed a slight decrease in headline and core inflation, while GDP returned to growth. ECB officials suggest no imminent rate cuts, with expectations for potential cuts in June.

Japanese Wage Data (Thursday):

The release could attract attention amid the Bank of Japan’s focus on wages and recent inflation data. Governor Ueda hinted at policy changes depending on wage increases. Former policymaker Sakurai suggested the possibility of ending negative rates in March if pay hikes exceed 4%.

Chinese Trade Balance (Thursday):

No forecasts are available for the trade balance data, but it will serve as a gauge of domestic and foreign demand. January’s data showed stronger export growth but weaker-than-expected imports, indicating fragile demand.

US Jobs Report (Friday):

The US is expected to add 188k nonfarm payrolls in February, with the unemployment rate remaining at 3.7%. Despite recent job growth, some indicators suggest cooling conditions ahead. Average hourly earnings are forecasted to rise by 0.2%, cooling from January’s rate.