The Week Ahead - 24 - 28 February 2025
These are the Key Macro Events for the upcoming week.
US – We expect PCE core inflation to come in 0.3% m/m this Friday. January core CPI inflation surprised to the upside at 0.4% m/m, but the PPI components that feed into PCE were relatively benign. Base effects mean that the y/y core rate will come down to 2.6% from 2.8%. We expect personal spending to stay flat relative to last month's big increase, while personal income may have risen by 0.4% on the back of higher than usual January cost-of-living adjustments for federal disbursements. Thursday, we get the second estimate of 2024 Q4 GDP, with no reason to expect a considerable adjustment.
Germany – The federal elections take place on Sunday, with the centre-right CDU/CSU (Union) set to take the most seats. The most likely resulting coalition will be Union-SPD grand coalition. The focus for markets over the coming weeks and months will be on prospects to ease the debt brake and on higher defence spending. See our German for more, as well as our note on prospects for higher .
China – After the loan-prime rates were left on hold last week, in line with consensus expectations including ours, no change in the 1-year medium-term lending facility rate (decision scheduled between 21 and 22 February) is expected for now. That said, we still anticipate further policy rate and RRR cuts going forward, and given the recent strengthening of the yuan versus the US dollar, the PBoC may even already take action next week.