Monday, May 28 2018 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
Updated: 10 hours 28 min ago
President Trump gave his first State of the Union speech in the Congress to highlight his administration’s policies. Rivalry between Washington and Russia/China and the intention to contain Iran and North Korea have been revealed once again in his remarks. Europe remained calm, while some hot spots were observed in Latin America and Asia.
Consumer prices increased by 1.02% (mom) in January, higher than our forecast (0.75%) but lower than the market call (1.3%). Annual consumer inflation fell to 10.35% from 11.92% thanks to favorable base effects mostly on food. We expect the headline to ease slightly below 10% by end 1Q but then show some volatility before falling to around 9% at the end of the year.
The progressive deceleration of domestic demand and foreign tourism, together with an improvement in the export sector of goods and the effects of Catalan political tension, bias the growth towards the peninsular center. The unemployment rate will approach minimums at the end of 2019 in some Autonomous Communities.
In a kind of déjà vu, the European Central Bank (ECB) is once again showing how ill at ease it is with exchange rate volatility. It did so when the euro appreciated to 1.20 against the dollar, and this was a factor in the downward revision of its inflation forecast and the subsequent announcement of the extension of its asset purchase programme for another nine months.