UK inflation fell to an annualised 3.4% in February, below market expectations of 3.5% and well under last month’s 4%.
The Consumer Price Index (CPI) is now running at its lowest rate since September 2021 after a steep decline in food prices. The data arrives just in time to sharpen scrutiny on the Bank of England’s interest rate decision tomorrow afternoon.
Tuesday was a rather unsettled day in currency markets. The pound recovered some pretty steep losses to finish the day around where it started against the euro and the US dollar, while EUR/USD followed a similar trajectory of early losses balanced out by an afternoon fightback.
Germany’s ZEW Economic Sentiment Index rose to its highest since February 2022 this month. The positive mood is a continuation of eight straight increases for the index and reflects growing anticipation of interest rate cuts over the next couple of months.
Building permits in the US came in above expectations in February’s preliminary data. Approvals for new residential construction increased 1.9% from the month prior, driven by authorisations for single-family homes.
The Bank of Japan’s historic decision to raise interest rates for the first time since 2007 didn’t do much to boost the Japanese yen. In fact, the yen lost over 1% to the US dollar on Tuesday. That’s largely because the central bank was not exactly gushing about the prospect of lifting rates into positive territory in the notes it published about the decision.
Canadian inflation, meanwhile, fell to 2.8% in February, well below forecasts of 3.1%. The Canadian dollar dropped sharply against its rivals upon the release of those numbers, although it had recovered some of its losses by the end of trading.
AI Wunderkind Nvidia is the talk of the town in stock market circles. Some had even been predicting it could double in value this week, a prediction commentators at Bloomberg compared to 2021’s “meme-stock mania”. Nvidia’s stock was down by around 3% on the week as of yesterday evening.
Lastly, UK chancellor Jeremy Hunt hinted at the prospect of a general election taking place in October. Guesses for when it would take place have ranged from May to next January, but Hunt explained October would give the Treasury just long enough to conduct its spending review before April 2025.
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