Market Movers
It is CPI day today with the release of CPI inflation for March in both the euro area and the US.
Euro-area inflation is not that exciting as we already have the Flash estimate. The final number is expected to be unchanged from the Flash report showing a headline inflation rate of -0.1% y/y and core inflation at 0.6% y/y.
In the US focus will be on core CPI as it is one of the factors the Fed is watching closely. We look for core CPI to rise 0.2% m/m in line with consensus and the annual rate to be unchanged from February at 1.7%. This should inspire confidence for the Fed that it is still on track to meet the 2% target in the medium term (note though that the Fed is targeting PCE inflation and not CPI inflation).
In the UK it is time for labour market data. We look for an unchanged unemployment rate at 5.7% (a little higher than consensus that sees a decline to 5.6%). Also keep an eye on wage growth, which is important for future inflation. We look for wage growth to rise to 1.7% (three-month average of annual rate) from 1.6%. in February - in line with consensus.
To Read the Entire Report Please Click on the pdf File Below