10 Things You Need to Know: March 15, 2022
Key data releases this week include: new home sales (Wed), durable goods orders (Thu), pending home sales (Fri), and consumer sentiment (Fri).
Haver
March 15, 2022
The Producer Price Index for Final Demand increased 0.8% (10.0% y/y) during February following a 1.2% January rise. A 0.9% increase had been expected in the Action Economics Forecast Survey. The PPI excluding food and energy rose 0.2% in February (8.4% y/y) after strengthening 1.0% in January. Expectations had been for a 0.6% gain.
Haver
March 16, 2022
Total retail sales including food service and drinking establishments improved 0.3% in February (17.6% y/y) after surging 4.9% in January, revised from 3.8%. A 0.4% sales increase had been expected in the Action Economics Forecast Survey. Sales in the retail control group, which excludes autos, gas stations, building materials and food services, declined 1.2% in February (+12.9% y/y) after rising 6.7% in January, revised from 4.8%.
Haver
March 18, 2022
Existing home sales declined 7.2% (-2.4% y/y) to 6.020 million (SAAR) in February from 6.490 million in January, revised from 6.500 million, according to the National Association of Realtors (NAR). The Action Economics Forecast Survey expected sales of 6.14 million units in February. These data are compiled when existing home sales close.
Haver
March 18, 2022
The Conference Board’s Composite Leading Economic Indicators index increased 0.3% during February (7.6% y/y) after falling 0.5% in January, revised from -0.3%. The gain matched expectations in the Action Economics Forecast Survey. The Leading Index is comprised of 10 components which tend to precede changes in overall economic activity. Eight of the index’s ten components contributed positively to the February increase.
Politico
March 17, 2022
FT
Thursday, March 17, 2022
The Bank of England’s monetary policy committee voted 8-1 to increase its base interest rate by 0.5 percentage points to 0.75%, as it seeks to slow inflation which has been intensified by Russia’s invasion of Ukraine. The bank said the hostilities have forced it to raise its expectation of inflation to peak this year “several percentage points higher” than its previous forecast.
FT
March 18, 2022
Reuters
Friday, March 18, 2022
Russia’s recent payments on two dollar bond issues are moving through the West’s financial institutions on their way to bond holders, indicating that the country has averted default on its US dollar-denominated foreign debt for now.
Financial Times
March 18, 2022
The Federal Reserve needs to raise interest rates above 3% before the end of this year to fight inflation, said James Bullard, president of the Fed’s Bank of St Louis and member of the Federal Open Market Committee. “The committee will have to move quickly to address this situation or risk losing credibility on its inflation target,” he said.
Capital Economics
March 18, 2022
We think the greenback will edge higher against most currencies over the course of this year. Indeed, we have revised up our forecast for the 10-year US Treasury yield, which we expect will rise, in general, by more than 10-year government bond yields elsewhere. This, along with the relatively limited impact from changes in commodity prices on the US economy, continues to suggest to us a favorable backdrop for the dollar.
FT
March 20, 2022
Cboe Volatility Index futures, the curve of which inverted ahead of Russia’s invasion of Ukraine, have returned to normal levels, with the price of March VIX contracts back below the price of contracts with a later expiry. The change is seen as a sign that traders are growing less apprehensive about market direction, and a modest return of investor activity might be forthcoming.