FX MACROECONOMICS by Marc Chandler


Macroeconomic Fundamentals Round-Up


Te macroeconomic


fundamentals


have not changed much in the first three months of the year. The US growth remains near trend, the labor market continues to improve gradually, both headline and core inflation remain firm, and the Federal Reserve remains on course to hike rates at least a couple more times this year, even though the


market is skeptical. The


uncertainty surrounding US fiscal has not been lifted, and it may not


14 FX TRADER MAGAZINE April - June 2017


be several more months.


Europe is growing perhaps a little quicker than a trend, but price pressures remain subdued. The preliminary March core CPI reading underscores the ECB’s conclusion that inflation has yet to be put on a stable path toward the target. While a move away from the negative deposit is understood to be beneficial to European banks, it seems premature to expect a change


in rates in the coming months.


The Japanese economy appears to be finding some traction, but it is narrowly based, and household consumption remains poor. There is no price pressure of which to speak. There is no pressure on the Bank of Japan to change monetary policy.


Aſter nine months since the UK’s referendum, Article 50 of the


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