Inflation Update
What’s in Today’s Report:
- Inflation Update
- EIA Analysis and Oil Market Update
Futures are moderately lower as a meeting between the Russian and Ukrainian foreign ministers yielded no additional progress towards peace.
Russia and Ukraine’s foreign ministers met in Turkey for over an hour, but there were no tangible breakthroughs made towards a lasting case-fire.
That lack of progress aside, the tone of the meeting was partially positive and a path towards peace appears to be slowly forming.
Today focus will be on the ECB Announcement (7:45 a.m. ET, press conference at 8:30 a.m. ET) and CPI (E: 0.7% m/m, 7.9% y/y).
Regarding the ECB, the key question is “how dovish is Lagarde?” in her comments, given the economic risks to Europe from the war. The market has priced in that she will be quite dovish, so there is a risk of a mildly hawkish surprise.
Regarding inflation, the number to watch is 8%. If CPI prints above 8% y/y, that will show inflation pressures are not receding and given exploding commodity prices, that means higher inflation for longer, which will likely make the Fed more aggressive on rate hikes (although a 50 bps hike next week is still unlikely).
Finally, we also get Jobless Claims (E: 218K) but that’s shouldn’t move markets,
