US CPI (Wed), PPI (Thu):

Analysts expect US CPI to rise +0.3% M/M in February (prev. +0.5%), while the core rate is seen rising +0.3% M/M (prev. +0.4%). Meanwhile, headline producer prices are seen rising +0.3% M/M in February (prev. +0.4%), while the core rate of PPI is seen rising +0.3% M/M, matching the January figure. Price proxies have been somewhat hawkish recently, with the ISM manufacturing report seeing its Prices Paid component spiking to 62.4 from 54.9, while the services ISM's prices sub-index rose to 62.6 from 60.4, with respondents stating that "incoming tariffs are causing our products to increase in price."

The Fed's most recent Beige Book also reported moderate price increases across regions, with some areas seeing faster inflation; businesses expect potential tariffs to drive further price hikes, with some firms raising prices preemptively due to tariff uncertainties and input costs. The CPI data comes ahead of the full impact of US tariffs, so may not fully show that fallout just yet. That said, Fed officials are also becoming wary of inflation progressing towards target; NY Fed's Williams this week noted that there will be some impact on inflation from the tariffs, and he is watching inflation expectations closely, adding that talk of tariffs is affecting how people are thinking about near-term inflation; Williams suggested keeping an eye on the University of Michigan inflation expectations components within its monthly consumer sentiment report, and also noted that the NY Fed's gauge of consumer inflation expectations has been more stable.

Meanwhile, Treasury Secretary Bessent has dismissed concerns that the Trump tariff hikes would trigger sustained inflation. Bessent suggested the Fed should view them as one-time price adjustments, aligning with his view that tariffs' inflationary impact is temporary, not a long-term economic concern. It is also worth noting that traders focus seems to be pivoting more towards growth dynamics, with some disappointing data released recently sending GDP tracking estimates for Q1 into negative territory. Further weaker data may embolden traders' betting on Fed rate cuts, with money markets now discounting three 25bps reductions this year, tilting more dovishly vs the two that it was fully pricing just a week ago.

UK GDP (Fri):

Expectations are for M/M GDP in January to print at 0.2%, slowing from the 0.4% pace seen in December, which brought the Q4 Q/Q rate to 0.1% vs. the Q3 outturn of no growth.

As a reminder, the prior release was bolstered by a 0.4% increase in services (which accounts for around 80% of output), as opined by Investec. This time around, economists at Pantheon hold a below consensus view of -0.1% M/M on account of "payback" from the "sharp rise in GDP in December". More specifically, PM notes services should be hampered by consumers' decision to stay away from pubs in January, whilst manufacturing "output should fall only 0.3% month-to-month...as a jump in car production offsets weakness elsewhere".

That being said, when looking through the volatility of monthly GDP releases, PM thinks "the economy is holding up well in the face of a barrage of punches, from payroll-tax hikes to tariff threats and geopolitical uncertainty". From a policy perspective, the next 25bps cut from the BoE is not fully priced until the August meeting. A soft outturn could see expectations of further easing brought forward. However, a more aggressive repricing in BoE easing bets would likely require inflation to play ball.

US Uni of Michigan (Fri):

Prelim University of Michigan for March is released next Friday, March 14th, whereby focus will centre around the headline metrics for whether it shows the continued trend of soft data out of the US, further illustrating ongoing growth concerns, but attention will also be on inflation expectations. On the former, and amid the recent deteriorating data, Atlanta Fed GDPnow currently forecasts Q1 GDP at -2.4%, and the influential Fed Governor Waller said he is seeing some signs of softer data, but have to respond to hard data.

Meanwhile, and maybe adding greater importance to the UoM figures, NY Fed President Williams said it is worth watching UoM inflation expectations data, and he watches expectations very closely. Note, UoM inflation expectations can be distorted amid differing opinions from Democrats and Republicans who take part in the survey, which can be extreme after times of an administration switch. In the Feb print, 1yr printed 4.3%, while the longer-term 5yr rose to 3.5%, as they rose for Independents and Democrats alike, but fell slightly for Republicans.

Disclaimer

This material is provided for informational purposes only and does not constitute financial, investment, or other advice. The opinions expressed in this material are those of the author and do not necessarily reflect the views of Trive International. No opinion contained in this material constitutes a recommendation by Trive International or its author regarding any particular investment, transaction, or investment strategy. This material should not be relied upon in making any investment decision.

The information provided does not consider the individual investment objectives, financial situation, or needs of any specific investor. Investors should seek independent financial advice tailored to their individual circumstances before making any investment decisions. Trive International shall not be liable for any loss, damage, or injury arising directly or indirectly from the use of this information or from any action or decision taken as a result of using this material.

Trive International may or may not have a financial interest in the companies or securities mentioned. The value of investments may fluctuate, and investors may not get back the amount they originally invested. Past performance is not indicative of future results.

For more information about Trive International, please visit http://trive.com/int

Additional Information

Investing involves risk, including the potential loss of principal. Diversification and asset allocation strategies do not ensure a profit or guarantee against loss. The content in this material is subject to change without notice and may become outdated or inaccurate over time. Trive International does not undertake any obligation to update the information in this material.

By accessing this material, you acknowledge and agree to the terms of this disclaimer. If you do not agree with these terms, please refrain from using this information.