Daily update
Daily update
- Swedish supermarkets are cutting food prices, after growing concerns about the extent of (profit-led) inflation. This is not just slower inflation, but outright deflation with price increases and profit margin expansions being reversed. It follows similar moves in Norway last month. If consumers are no longer prepared to live in a pricing power fairy tale, believing the stories retailers tell to justify margin expansion, disinflation or deflation can swiftly follow.
- UK February consumer credit data is due. Credit data is likely to get much more attention in the coming months, as investors focus on lending standards. Credit card borrowing may lag tighter lending standards however. It is less likely that credit limits are cut, instead limits will not be raised. This creates the Wile E. Coyote effect, running off the edge of the cliff until the absence of supporting credit suddenly becomes apparent.
- US pending home sales are due. There have been some signs of stabilization in the US property market, after the damage done by Federal Reserve Chair Powell’s fanatical “hike, hike, hike” strategy.
- Geopolitical tensions may get some attention in markets. Beijing has suggested that the visit of Taiwan’s leader Tsai to the United States would be seen as a “serious provocation.”
