The Simpsons had it right this whole time/Not much else

Well, The Simpsons had it right all the way back in 1998,//m.youtube.com/watch?v=bBMeMrPuQyU. Yeltsin by the way handed the reigns to Putin on December 31st, 1999.

On the central bank front, the Reserve Bank of New Zealand raised rates by 25 bps to 1.00% as expected. They also foresee this rate getting to 3.25% by the end of next year. That is above the estimate they gave of 2.5% back in November. They also said QT will begin as they will no longer reinvest maturing bonds they hold. The surprise lift in the terminal rate resulted in their 2 yr yield to jump 13 bps to 2.36% which is the highest since December 2016. While New Zealand doesn’t have any economic relevance of note relative to the rest of the world, it’s just another sign of the global trend to tighten monetary policy. Australian bond yields jumped as well.

Following the lift seen in yesterday’s German IFO business confidence index, French business confidence did as well in February. This index rose 5 pts m/o/m to 112 and well better than the estimate of 108. The coming end of covid as we’ve known it was the main reason as the services component led the way. Retail confidence got back what it lost in January while manufacturing slipped by 1 pt. The challenge now for all of Europe is persistently high energy prices that will impact not only the cost of heating one’s home and filling one’s tank but for all those industrial businesses that use natural gas as a feedstock. The TTF natural gas price in Europe by the way is up by another 4.6% after yesterday’s 12.3% spike. At 84, it’s the highest since the end of January.

Also out of Europe was Germany’s consumer confidence index which unexpectedly softened by 2.4 pts to -8.1. The estimate was -6.3. The higher cost of living was the main culprit. GFK said “Above all, expectations of a significant easing in price trends at the beginning of the year have been shattered for the time being, as inflation rates continue to hover at a high level.” The number isn’t market moving but inflation is not just the concern of US citizens.