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Week ahead: FOMC meeting minutes, RBNZ rate statement, and Canada CPI in focus

February 20, 2023

In the upcoming week, several significant events and economic data releases are scheduled to take place. Among them are the Federal Open Market Committee (FOMC) meeting minutes, the Reserve Bank of New Zealand (RBNZ) rate statement, and the Canada Consumer Price Index (CPI) report. 

These events are expected to garner considerable attention from investors, economists, and financial analysts as they provide insights into the current state of the global economy and the outlook for the future. Market participants will closely monitor these reports and releases to understand the current economic climate better and make informed investment decisions.

Let’s take a closer look at these events:

UK and US Flash Services PMI (21 February)

The UK’s January 2023 Flash Services PMI decreased from 49.9 in December 2022 to 48.7. The US Flash Services PMI increased from 44.7 in December to 46.8 in January.

For February 2023, analysts anticipate that the UK Flash Services PMI will increase to 49.3, while the US Flash Services PMI will rise to 47.4.

UK Flash Manufacturing PMI (21 February)

The UK Flash Manufacturing PMI increased to 47.0 in January 2023 from the 31-month low of 45.3 recorded in December 2022. 

Analysts predict a further increase in the UK Flash Manufacturing PMI to 47.5. This data is closely watched as it provides an early indication of the health of the UK manufacturing sector, which plays a crucial role in the country’s economy.

Canada Consumer Price Index (21 February)

Canada Consumer Price Index declined by 0.6% in December 2022 compared to the previous month. 

Analysts forecast a 0.2% increase in Canada’s CPI for January 2023. This forecasted increase is significant as it could indicate the beginning of a broader economic recovery.

Australia Wage Price Index (22 February)

The Australian Wage Price Index (WPI) experienced a year-on-year increase of 3.1% in Q3 2022, as per the seasonally adjusted data, marking an acceleration from the 2.6% growth seen in Q2. This result is the most substantial reading since Q1 2013.

For Q4 2022, analysts forecast that Australian WPI will increase by 3.6% year-on-year. This anticipated growth is a positive sign for the Australian economy, and investors will be keeping a close eye on the release of the WPI data for insights into the country’s economic health.

RBNZ Monetary Policy and Rate Statement (22 February)

The Reserve Bank of New Zealand increased its interest rate in November 2022 by 75bps to 4.25% from the previous rate of 3.5%.

Analysts expect the RBNZ to announce another increase in its interest rate of 50bps to 4.75% this month. The expected gain would signify the central bank’s continued efforts to keep inflation under control and maintain a stable economy.

FOMC Meeting Minutes (23 February)

In its February 2023 meeting, the US Federal Reserve increased the fed funds rate target range by 25bps to 4.5%-4.75%. In a statement, Fed Chair Jerome Powell indicated that the Fed had the necessary tools to control inflation, and disinflation had begun.

Powell’s comments suggested that there would be no significant changes to the Fed’s future rate increase strategy, despite a strong January jobs report. 

Core PCE Price Index (23 February)

In December 2022, the US Core PCE price index, excluding food and energy, increased by 0.3% on a month-on-month basis, compared to the 0.2% growth seen in the previous month.

Analysts predict that the US Core PCE Price Index will increase by 0.2% this month.

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