• US inflation data crucial ahead of FOMC meeting

  • Governor Poloz to speak about labour market in the early afternoon

  • BoJ will release minutes from its last monetary policy meeting overnight

In Tuesday’s economic calendar we have few releases planned but some really important ones. The US inflation data will draw investors’ attention as it may be decisive when it comes to the pace of Fed’s monetary tightening. It may also set the attitude of the central bankers ahead of next week’s meeting. In the early afternoon BoC Governor Poloz will speak at Queen’s University on the today’s labour market. The speech will be followed by the Q&A session thus Governor’s remarks may be a source of increased volatility on the CAD tied FX pairs. Overnight minutes from the BoJ January’s meeting will be released.  

12:30 pm BST – US, CPI Inflation for February. As Federal Reserve is tightening its monetary policy investors pay close attention to inflation data in order to assess the pace of interest rate hikes. In case the inflation moves closer to the target we may see not three but four hikes this year. Given that the FOMC will meet and decide on the level of interest rates next week we can expect increased volatility on the USD tied FX pairs. Market consensus expects the headline reading to show value of 2.2% YoY and 0.2% MoM. For the core measure economists forecast a reading of 1.8% YoY and 0.2% MoM.

8:30 pm BST – API Weekly Crude Oil Stocks. Oil prices have been trading sideways as of late. The inventories data does not help break this tendency either as latest API and DOE reports have been mixed. Moreover, increasing US output does not bode well for the oil bulls and seems to offset OPEC efforts to stabilize market. Last week’s report has signalled a 5.66M increase in oil stocks.

Central bank speakers scheduled for today:

2:15 pm BST – BoC Governor Poloz

10:10 pm BST – RBA’s Kent

link do file download link

The US Dollar Index (USDIDX) has made its way back above 90 pts mark recently. Will US inflation data provide further support for the greenback? Source: xStation5