OPEC signals risk to oil demand outlook due to war in Ukraine and inflation

Turkey’s inflation hits 20-year high; The Spanish labor market is improving — Macro Snapshot

RIYADH: Turkey’s annual consumer inflation jumped to 61.14% in March, its highest level in 20 years, according to data released on Monday, fueled by rising energy and commodity prices then that the fallout from the Russian-Ukrainian conflict is compounding the impact of the fall of the lira last year.

Inflation has been rising since last fall, when the pound tumbled after the central bank launched a 500 basis point easing cycle desired by President Tayyip Erdogan.

On a month-to-month basis, consumer prices rose 5.46%, the Institute for Statistics said, just below a Reuters poll forecast of 5.7%. The annual consumer price inflation forecast was 61.5%.

The Spanish labor market is improving

Spain’s labor market withstood soaring inflation and a crippling strike by truckers in March to see a drop in unemployment, data showed on Monday, helped in part by reforms to reduce reliance on temporary contracts .

The number of people registered as unemployed in Spain fell by 0.09% in March compared to February, or by 2,921 people, leaving 3.11 million people unemployed, according to data from the Ministry of Labor.

Spain created 23,998 net jobs during the month, an increase of 0.12% compared to February.

Consumer prices rose 9.8% in March in Spain, driven by energy and fresh produce, after the country suffered two weeks of strikes by transport workers that paralyzed factories and emptied shelves supermarkets.

Inflation soars in Poland

The National Bank of Poland is expected to raise its main interest rate by 50 basis points to 4.00% on Wednesday, according to a Reuters poll, but with inflation in double digits, economists believe a bigger hike is possible.

Consumer price inflation in the largest economy in the EU’s eastern wing hit 10.9% in March, statistics office data showed on Friday, as war in Ukraine led to a spike fuel and food prices.

At its March session, the Polish central bank’s Monetary Policy Council responded with a bigger-than-expected hike of 75 basis points, but the zloty strengthened by more than 7% from its lows in start of the war, most economists believe that pricing officials will opt for a lower increase this time around.

“We see 50 basis points, with an upside risk,” said Rafal Benecki, chief economist at ING in Poland.

German and Russian oil, gas

Germany will face a deep recession if there is a halt in imports or the delivery of Russian gas and oil, a leading German banking lobby warned on Monday.

Europe’s biggest economy is heavily dependent on Russia for energy, and the nations’ banks have echoed concerns about a potential energy disruption voiced by big names in the industry in recent days. Read the full story

Christian Sewing, CEO of Deutsche Bank, said in his role as chairman of German banking lobby BDB that banks expected significantly slower growth this year of around 2% due to the war in Ukraine.

BOJ urged to raise interest rates

Japan’s central bank should raise interest rates to ensure the country won’t lag the rest of the world in its monetary policy, said an associate of Prime Minister Fumio Kishida whose ideas likely inspired the Prime Minister’s economic policy framework.

Kishida’s government is expected to release up to $400 billion in public spending over the next five years to boost medical and disaster relief investment, businessman George Hara also told Reuters in an interview.

The vision of Hara, who leads an organization that aims to reduce global poverty, likely served as the backbone of Kishida’s “new capitalism” agenda through which the prime minister is pushing for a greater distribution of wealth.

Philippine peso gains, Malaysian ringgit slips

The Philippine peso hit a five-week high on Monday, supported by improving manufacturing data and the central bank’s recent hawkish tone on the gradual normalization of liquidity pressures, while the Malaysian ringgit dragged losses among Asian emerging currencies.

The peso rose 0.3% to its highest level since March 1, while the Malaysian ringgit fell 0.3% despite higher oil prices as investors kept a watchful eye on the plan. the International Energy Agency to follow the United States in the release of oil reserves.

At a meeting late last month, Bangko Sentral ng Pilipinas left key interest rates unchanged, but underlined its willingness to temper heightened price pressures by raising inflation expectations. The currency has gained 1.8% since the announcement.

Steve R. Hansen