26 February 2024Deutsche BankResearch Global Economics DBDaily Date US core PCE this weekUK: GfK Consumer Confidence (Feb): Down 2pts to -21, missed.DEU: GDP (Q4F): Confirmed at -0.3%qoq, in line.DEU: IFO survey (Feb): Up 0.3ptsd to 85.5, in line.US equities were flat Friday, S&P holding onto a record high and up 1.7% over the week. US10yr yields down 7bps Friday to 4.25%, down 3bps over the week.Germany IFO in line, up 0.3pts to 85.5 in February, but current assessment slipped 0.1pt to 86.9. Expectations up 0.6pts to 84.1.In light of the still subdued level on the current assessment IFO index and disappointing German PMIs from Thursday, Marc Schattenburg has downgraded his Q1 GDP forecast for Germany to -0.2%qoq, and sees downside risks for his 2024 outlook.ECB's Lagarde: Q1 wage data "will be important" for policy assessment, ECB moves are "independent" of other central banks - suggests Lagarde does not think ECB needs to 'wait' for Fed to cut.ECB's Stournaras: Expects first rate cut in "June", April possible only if ECB "gets right kind of data"ECB's Nagel: More comfortable with current market pricing for ECB cut (which has a 25bp cut fully priced by June). ECB "mustn't be tempted" to cut earlier.ECB's Simkus: March cut is "out of the question", April "unlikely".Could easy FCIs shake the Fed’s confidence in disinflation? Justin Weidner thinks the Fed can be accepting of easier financial conditions as long as inflation progress continues, but a further easing in FCIs combined with stronger inflation prints could meaningfully shift the balance of risks around the Fed's inflation outlook.Europe inflation chartbook. The inflation cycle has turned, 2024 is all about the last mile, and DB's Feb-24 forecasts are for the underlying pace of inflation to remain round its Oct-23 and Dec-23 observed pace, slightly above target. Marc de-Muizon Figure 1: Market SummaryEquitiesFX S&P5005088.800.0% EURUSD1.0823-0.31% Stoxx600497.250.4% USDJPY150.49-0.22% FTSE7706.280.3% GBPUSD1.2671-0.07% Nikkei22539098.682.2% USDCAD 1.3503-0.36% CSI3003489.740.1% AUDUSD 0.6563-0.33% VIX13.74-0.80 NZDUSD 0.6197-0.21%DebtCommodities UST104.25-0.07 Oil81.68-2.4% UST24.69-0.02 Gold2035.300.3% SFR44.810.00 CRB270.82-1.2% Copper388.55-0.8%Source : Deutsche Bank, Bloomberg Finance LPPhil OdonaghoeEconomist+61-2-8258-1606Deutsche Bank AG/SydneyIMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. MCI (P) 041/10/2023. UNTIL 19th MARCH 2021 INCOMPLETE DISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS.US core PCE this weekDistributed on: 25/02/2024 17:58:08 GMT7T2se3r0Ot6kwoPa26 February 2024DBDailyPage 2Deutsche Bank AG/Sydneywith all the details.Short US futures positions held by leveraged investors and repo volumes have decreased somewhat in recent months. Steven Zeng notes that this suggests a potential reduction in the Treasury basis and...
