US labor lights up as price gauge hits 40-year high: Green Week

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(Bloomberg) – U.S. jobs and wages likely continued to grow strongly in March and a key measure of inflation may have hit a new 40-year high, reports that could prompt the Federal Reserve to cut further faster monetary stimulus.

Employers likely added nearly half a million jobs and average hourly wages rose 5.5% from a year earlier, according to median projections from a Bloomberg survey ahead of government data on Friday. The unemployment rate is expected to fall to 3.7%.

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The numbers will help policymakers determine whether larger interest rate hikes are warranted as the Fed scrambles to contain soaring inflation.

A day earlier, another February income and expenditure report is expected to show the personal consumption expenditure price index accelerating to an annual increase of 6.4%. That’s more than triple the Fed’s inflation target.

Friday’s release will be the last monthly jobs report before the next U.S. central bank meeting in early May, though officials will also get inflation data for March that will reflect the impact of Russia’s war. against Ukraine.

What Bloomberg Economics says:

“We expect the March jobs and inflation data to further strengthen the resolve of Fed hawks – and attract those who were still skeptical – about the need for a 50 basis point hike. at the May meeting.”

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–Anna Wong, Yelena Shulyatyeva, Andrew Husby and Eliza Winger, economists. For a full analysis, click here

The US data calendar is busy over the coming week and will also include reports on jobs, consumer confidence and a closely watched manufacturing survey.

Regional Fed Chairs Patrick Harker, Raphael Bostic and Thomas Barkin are expected to speak at separate events.

Elsewhere, Chinese factory activity, a further surge in eurozone inflation and likely rate hikes by central banks from Eastern Europe to South America will attract investors’ attention. . Colombia, in particular, could experience its largest increase in borrowing costs in the current century.

Click here to see what happened last week and below is our summary of what is happening in the global economy.

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Europe, Middle East, Africa

Fresh off the political controversy of his spring budget statement, Chancellor of the Exchequer Rishi Sunak will testify before lawmakers on Monday in a session likely to focus on whether he could have done more to ease the UK cost of living crisis.

Bank of England Governor Andrew Bailey, whose institution is also on the front line in tackling soaring inflation, is due to speak on the same day.

Consumer prices could also be a dominant theme in the Eurozone. March inflation data for the region’s four major economies will be released on Wednesday and Thursday, before statistics for the entire currency area arrive at the end of the week. All are likely to post decades highs as energy costs rise in the wake of the war in Ukraine.

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While the median forecast for the euro zone is 6.7% — a new high in the history of the single currency — many economists predict even faster inflation. The highest estimate is for a result of 7.7%.

Meanwhile, weekly inflation data from Russia on Wednesday will give the latest indication of the costs consumers are incurring for sanctions as panic buying exacerbates shortages.

Elsewhere in Eastern Europe, decisions are expected from the Czech and Hungarian central banks. On Thursday in Prague, officials could raise interest rates again to tackle the fastest inflation in nearly a quarter century.

Central bank meetings will also be in the spotlight across Africa. Kenyan policymakers are likely to keep rates unchanged for a 13th consecutive meeting on Tuesday as they assess the impact of a lower shilling. The next day in Mozambique, officials could also suspend borrowing costs.

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Thursday is Angola’s turn. The central bank is also expected to keep rates steady as subsidies and a rally in the kwanza, the world’s best-performing currency against the dollar this year, help contain inflation.

For more, read Bloomberg Economics’ full week for EMEA

Latin America

Brazil’s central bank kicks off the week with its weekly analyst expectations survey, followed by Mexico’s release of February trade figures, which many economists see rebounding from a dreadful January.

In Argentina, fourth-quarter output slowed more than expected, and mounting headwinds suggest that January’s GDP indicator reading, due on Tuesday, could show a monthly contraction.

Next, Mexico releases unemployment and budget data, while Chile releases six separate economic releases, including its proxy GDP report for February.

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At the end of the week, Peru reports March inflation for its capital, Lima, while the Colombian central bank is expected to raise its key rate by 150 basis points to 5.5%, which would be its highest. increase since 1998.

Over the last three days of the week, Brazil releases its broadest measure of inflation, total loans, unemployment, budget and trade data, capped by industrial production.

A few hours later, the central bank of Chile closes its second meeting of the year. Soaring inflation is prompting many analysts to target a second consecutive 150 basis point hike, pushing the key rate to 7%. Traders surveyed see a larger increase, of 200 basis points.

For more, read the full Latin America Week Ahead from Bloomberg Economics

Asia

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The Australian government unveils its final budget on Tuesday ahead of an election due by May 21, with polls showing Prime Minister Scott Morrison needs to pull something out of his hat if he is to secure another victory from behind.

Japanese Prime Minister Fumio Kishida is facing calls for additional measures to ease the pain of soaring energy prices and to support a shrinking economy this quarter.

Japanese employment, industrial production and retail sales figures will give an indication of the severity of the recession. The Bank of Japan will release its Tankan business survey, showing the mindset of businesses as the war in Ukraine enters its second month.

South Korea’s export and import figures for March, due Friday, will provide the latest information on the war’s impact on global trade and Seoul’s trade balance.

China’s PMI report will be watched closely on Thursday for the impact of shutdowns on key manufacturing hubs to contain Covid-19 outbreaks. Manufacturing reports from across the region will follow on Friday.

For more, read the full Asia Week Ahead from Bloomberg Economics

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