The Senior Loan Officer Opinion Survey (SLOOS) has revealed a decline in economic activity during the last few quarters. The latest survey revealed widespread demand deterioration and tighter credit standards across all loan types in the last three months of 2022. A decrease in credit availability serves as an indication of the wider repercussions of a restrictive monetary policy beginning to manifest. I forecast that the consumer price index (CPI) rose 0.5% in January, with the related year-ago rate easing from 6.5% in December to 6.4%.
Disney (DIS) announced 7,000 jobs being cut, and $5.5 billion in cost cutting. The shift at Disney has also caused activist investor Nelson Peltz to withdraw from his proxy battle in solidarity with CEO Bob Iger and his decisions, netting a cool $150 million paper profit for the investor.
The Bank of England has considered the possibility that the 50bp interest rate increase in February might have been the final one. We anticipate that the Federal Reserve will implement one more 25 basis points rate hike in March; however, the data to be released next week will be significant. With the Fed minded to keep hiking to ensure inflation comes down, it makes the likelihood of a May rate hike in addition to a March hike look more plausible.
Jobs and wages have shown little-to-no sign of easing, at least in the official numbers. Inflation of “core goods” is dropping quickly as demand weakens and supply lines become better organized – basically the opposite of what caused inflation to increase during the pandemic. It is predicted that the Consumer Price Index (CPI) will decrease slightly due to a nearly 4% decrease in the prices of petrol and diesel Core inflation is likely to decrease as well, though not as substantially. But the Bank of England will be watching ‘core services’ inflation most closely, given that it’s less volatile and tends to experience more persistent trends than goods categories.
Retail sales have fallen in 12 out of the last 14 months, and we don’t think January was an exception. This would suggest a slight decrease in GDP during the initial quarter. Federal Reserve Chair Jerome Powell’s recent remarks at the Economic Club of Washington were pretty like what he said after last Wednesday’s FOMC meeting: disinflation has begun, it has a long way to go, and further interest rate increases are likely needed.
This week should have some excitement as well.
0. “US weekly prospects” FXStreet, 13 Feb. 2023, https://www.fxstreet.com/analysis/us-weekly-prospects-202302130500
1. “Weekly Economic & Financial Commentary: International Central Banks Deliver Another Round of Rate Hikes” Action Forex, 11 Feb. 2023, https://www.actionforex.com/contributors/fundamental-analysis/485872-weekly-economic-financial-commentary-international-central-banks-deliver-another-round-of-rate-hikes/
2. “Week Ahead: Inflation Data, Interest Rates, and Time to Buy Shopify Breakout?” Yahoo! Voices, 13 Feb. 2023, https://www.yahoo.com/now/week-ahead-inflation-data-interest-204008296.html
3. “Key Events In Developed Markets Next Week” MENAFN.COM, 10 Feb. 2023, https://menafn.com/1105556757/Key-Events-In-Developed-Markets-Next-Week
4. “Massive CPI Report And Other Key Themes To Watch This Week” Barchart, 12 Feb. 2023, https://www.barchart.com/story/news/14129804/massive-cpi-report-and-other-key-themes-to-watch-this-week