Inflation and interest rates

Daily update

In a relatively quiet data calendar, Spanish March consumer price inflation gets some attention. The expectation is for a modest increase in the headline rate and a modest decline in the core rate. However the consensus is built on a relatively small number of forecasts across a relatively wide range of views, so comparisons need to be treated with caution.
The Swedish Riskbank decides on policy rates today, with 100% of surveyed economists expecting no change. However interest may be increased by the Swiss National Bank’s decision to cut rates last week. Sweden is not Switzerland—its currency is in a different place, and while inflation has fallen it is not as benign as the Swiss rate.
There are a few central bank speakers clustering around media microphones today, mainly from the European Central Bank. It is frankly difficult to even pretend to be excited about this prospect, so I am not going to try.
A paper from the New York Federal Reserve has highlighted an interesting question—does globalization raise or lower inflation? The paper suggests a push to increase manufacturing output in China may raise some prices (even as labor intensive product prices decline) because of the price consequences of China’s relatively inefficient consumption of commodities.