Aurelia Butler

Will US inflation continue to slow?US inflation has slowed consistently over the past year, although declines have moderated in recent months as price pressures in sectors like shelter — which includes rents — have remained high.On Wednesday, the Bureau of Labor Statistics will release its latest consumer price index report, which is forecast to show that inflation rose at a slower pace in March than the previous month. Economists surveyed by Bloomberg are expecting the headline figure to have risen 5.2 per cent year-on-year, compared to 6 per cent in February.Core CPI — which strips out the volatile food and energy sectors — is expected to have risen 5.6 per cent on the year, from 5.5 per cent in February. But the month-on-month core CPI figure is expected to have dropped from 0.5 per cent to 0.4 per cent.Barclays analysts argue that the expected drop in headline inflation this month will be attributable to lower energy and food costs. The persistent strength in core inflation is likely to have been driven by shelter costs, even as the analysts predict disinflation in other core services, like transport and medical care.Wednesday’s reading will be an essential piece of the Federal Reserve’s deliberations in May over whether to pause its historic campaign to raise interest rates. Kate DuguidHas the UK economy stalled?Data due on Thursday will confirm whether the UK economy stagnated in February — an outcome that economists predict as widespread strikes during the month limited the rebound from lower business price pressures and greater optimism about the broader outlook.Economists polled by Reuters forecast that UK gross domestic output held steady between January and February, following a 0.3 per cent expansion in the previous month.Business surveys, such as the purchasing manager indices, or PMI, pointed to an emerging recovery in business activity in February. It was boosted by lower input price growth, easing of supply chain disruption and waning recession risks.Official data has already showed that retail sales expanded in February, while the construction sector is expected to have rebounded after heavy rainfall affected activity in January.However, Samuel Tombs, chief economist at the consultancy Pantheon Macroeconomics, predicted that the strikes will result in a 3 percentage point hit to the month-on-month growth, reflecting a loss of output in education, defence and public administration.He calculated that the stagnation in February should leave output on course to fall marginally between the first quarter of 2023 and the previous three months, which would follow a 0.1 per cent expansion in the previous quarter.“A sustained upturn will not likely take hold until the third quarter, when prices should start to rise at a slower pace than wages,” said Tombs. This would be earlier than the latest forecast from the Bank of England, which expected economic growth to return only in the middle of next year. Valentina RomeiHas Chinese bank lending recovered?China is set to release a series of high-profile economic data this week including readings on inflation, trade and renminbi lending — any one of which could unsettle markets.First up is the official consumer price index for March slated for release on Tuesday, with economists polled by Bloomberg expecting annual consumer inflation to hold steady from the previous month at 1 per cent. Next, imports and exports are out on Thursday; economists expect each to notch declines of around 7 per cent on the year.But the wild card will be a reading on new renminbi bank loans that the country’s central bank could release at any point during the coming week and which “should move markets”, according to Iris Pang, chief economist for Greater China at ING.Economists at Goldman Sachs expect that after a sharp drop in February, bank lending will have surged to Rmb3.3tn in March, on the back of supportive policy from Beijing and strong growth in credit demand driven by the country’s economic reopening from pandemic restrictions. They added that a cut to banks’ required level of reserves late last month “suggests policymakers would like to keep [their] monetary policy stance accommodative to facilitate growth recovery”.Pang at ING expects lending to come in even higher at Rmb4tn due to both the reserve requirement cut and a “significant amount of liquidity injection” in the final two weeks of March. Hudson Lockett More

“Our banks did their homework very well after the financial crisis. They are very well prepared,” Brunner told Swiss newspaper Neue Zuercher Zeitung.He also defended Raiffeisen Bank International (RBI) which has come under fire for continuing to operate in Russia despite the war in Ukraine.The Austrian lender is now the most important Western bank in Russia, offering a lifeline to people and businesses there seeking to make international payments, but it is under growing pressure from Western officials and investors to quit.In February the bank said it had received a request for information from the United States’ sanctions authority about its business related to Russia.Last month RBI said it was considering a sale or possible spin off of the Russian business.”As for RBI, the bank complies with all international sanctions,” Brunner told NZZ. “It is also not subject to sanctions itself,” he added.”Incidentally, there are other European banks that continue to operate legally in Russia. It is crucial for us that all sanctions are observed,” he said.The minister also said Austrian inflation, which fell to an estimated 9.2% in March, was still too high and called on the European Central Bank to do more to contain price increases.”The European Central Bank (ECB) in particular can do something about this, as a member of the euro zone we are dependent on the ECB,” Brunner said. More

(Reuters) – Deposits at U.S. commercial banks rose near the end of March for the first time in about a month, showing signs of stabilizing after the two largest bank failures since the financial crisis rocked the banking system and rattled depositors.Federal Reserve data released on Friday showed deposits at all commercial banks rose to $17.35 trillion in the week ended March 29, on a nonseasonally adjusted basis, from a downwardly revised $17.31 trillion a week earlier.It was the first increase since the start of March and marked an end, for the moment, to a record flight of deposits triggered by the collapses of Silicon Valley Bank and Signature Bank (OTC:SBNY) toward the middle of last month. The second and third largest bank failures in U.S. history forced federal regulators to guarantee all deposits at both institutions and prompted the Fed to take emergency actions to restore confidence in the banking system.Deposits rose at both the largest 25 banks by assets and at small and mid-sized banks as well. Small banks had been particularly hard hit by deposit outflows after the back-to-back failures, with some depositors shifting cash to larger institutions on concern that any funds in excess of the $250,000 per depositor federal insurance limit might be at risk.After more than a year of sharp interest rate increases by the Fed designed to slow the economy in order to cool inflation, last month’s banking turmoil has exacerbated worries that the central bank’s aggressive tightening may trigger a recession. Economists and policymakers are watching the Fed’s weekly snapshot of the financial condition of the country’s banks closely for signs deposit flight has run its course. They are watching just as closely for indications that lenders might start to rein in credit as a result, an action that could accelerate the onset of a economic slowdown or make it worse.Indeed, overall credit from U.S. banks did decline by a record of more than $120 billion in the latest week, on a nonseasonally adjusted basis, but that was largely the result of banks divesting $87 billion in securities to nonbanks, such as hedgefunds. The Fed said banks had offloaded that amount of assets in each of the two latest weeks, most of it coming in the form of Treasuries and mortgage-backed securities.The moves coincided with recent sales of various assets of the two failed banks under the direction of the Federal Deposit Insurance Corp, but the Fed did not specify if that was the impetus for the divestitures.At the same time, however, lending to businesses and consumers by banks held steady with $12.07 trillion in loans outstanding as the month neared its end, up fractionally from a week earlier. While loans for both commercial and residential real estate, and for commercial and industrial loans, a benchmark for business credit, each fell marginally, the declines were offset by a pickup in consumer loans led by credit card balances. More