Daily update
Daily update
- It’s a quiet start to a busy week. The ECB makes a policy decision later this week—no one is expecting a change, but it allows for an official statement and ECB President Lagarde will speak. While Lagarde speaking might lack a certain scarcity value, the tone of recent comments from ECB members has tended towards rate cuts being later.
- Federal Reserve Chairman Powell testifies to Congress later in the week. Recent Fed speakers have tended to suggest a slower pace of rate cuts than was the case with rate increases. This is logical— rate increases were taking policy from an emergency setting to neutral, and then overtightened. Rate cuts are designed to keep real interest rates more or less stable.
- OPEC seems unhappy with disinflation forces and has pledged to extend oil production cuts until June. Against this, non-OPEC production has been increasing, and a poor European ski season (also known as a mild winter) has affected demand.
- There is a lot of political noise this week. The US "Super Tuesday" primaries are not likely to move markets (investors have firm assumptions about the presidential candidates). There will be policy speeches at China's National People's Congress—the interesting question is how to improve the quality of growth.