Daily update
Daily update
- The minutes of the last Federal Reserve meeting are due, and markets will care. The US is approaching changes in both monetary and quantitative policies. Fed Chair Powell seemingly lacks the communication skills of his predecessors, so markets are easily pushed about by shifting policy expectations. The minutes offer a more considered view of where policy should be heading.
- The UK’s nominal fiscal surplus hit an all-time record in January, causing a further decline in the debt-to-GDP ratio. December’s borrowing was revised slightly lower, hinting (marginally) at better economic activity. Tax payment timing nearly always generates a January surplus. Lower inflation cut inflation-linked interest payments. The UK government pays more than it should for inflation-linked debt, as with some prices like food are overstated, and the reference retail price measure officially deemed unreliable.
- Korea’s export data for the first 20 days of February was heavily distorted by the timing of the lunar new year. However, exports of microchips seemed to be robust, with global demand arising from investment in technology. Trends in exports for other goods were less clear.
- Eurozone consumer confidence data will, rightly, be ignored by markets. Yesterday’s negotiated wage data was as expected, slowing but still giving a positive real wage growth.