February 20, 2023
Fed’s Preferred Inflation Gauges Seen Running Hot
The Federal Reserve’s preferred inflation gauges this week, along with a groundswell of consumer spending, are seen fomenting debate among central bankers on the need to adjust the pace of interest-rate increases.
The US personal consumption expenditures price index is forecast to rise 0.5% in January from a month earlier, the largest advance since mid-2022. The median estimate in a Bloomberg survey of economists expects a 0.4% advance in the core measure, which excludes food and fuel and better reflects underlying inflation.
Russian Crude Exports Surge Despite Impending Cut to Output
Russia’s seaborne crude exports jumped last week, with just days to go before the world’s third-largest producer is due to cut output.
The country exported 3.6 million barrels a day from its ports in the seven days through Friday. That was a 26% hike in what are noisy weekly data. Flows climbed to multi-week highs from all its Baltic, Black Sea, Arctic and Pacific terminals. A less-volatile four-week average of exports also rose.
Korea Bond Bulls Unfazed by Sharpest Selloff in Five Months
The sharpest selloff in Korean bonds in five months isn’t denting the confidence of bond bulls, as they wager for a reversal in the coming months on bets the Bank of Korea may be heading for rate cuts amid signs of a slowing economy.
The yield on the nation’s three-year bond surged by more than 50 basis points in the last two weeks, the biggest jump since September, to 3.66% on Monday. That’s set to fall below 3% later this year on bets the BOK may cut rates twice in 2023 as falling house prices add to economic woes, according to DB Financial Investment Co. Shinhan Asset Management Co. also predicts bond gains.
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