Week Ahead – Cause for optimism

Minutes and PMIs eyed

Investors are growing increasingly hopeful about the economic outlook and next week’s PMIs will tell us whether businesses share their optimism. Central bank minutes will also provide more insight into whether policy makers are encouraged and what it means for monetary policy.

US PMIs in focus as Democrats force stimulus through Congress

UK outlook eyed after biggest contraction since 1709

Heavy data week for Japan



Optimism grows for the US economy as the COVID-19 vaccine rollout appears poised to provide every American who wants to get vaccinated a chance to get one by April.  The holiday surge is behind us and cases and hospitalizations continue to trend lower.  The South African variant remains the biggest risk as it makes its way across several states.  COVID vaccines appear less effective to the South African variant, but optimism remains we won’t see widespread lockdowns.  

On the data front much attention will fall on flash PMIs and retail sales.  Manufacturing and services PMI readings are expected to soften in the preliminary February readings.  Economists are anticipating the first rise in retail sales since September.  The FOMC will release the minutes to the January meeting.  We’ve heard recently from Powell so the Minutes might only provide limited insights.  


A broad selection of economic data points to look for next week including employment, GDP and ZEW survey’s on Tuesday and PMI numbers on Friday. In the middle we have ECB minutes on Thursday which shouldn’t contain any major surprises given the central bank only announced further easing measures in December.

Mario Draghi is set to become the next Italian Prime Minister after receiving the backing of Five Star Movement to form a national unity government. The move means Draghi has the backing of almost all of the major parties. I imagine rallying them going forward won’t be quite so easy.


The UK saw its worst growth since the Great Frost of 1709 last year but there was cause for optimism in the data. The country grew faster than expected in the final quarter and while its annual contraction of 9.9% is down there with the worst, the success of the vaccine rollout means it’s positioned for a strong recovery after the first quarter of this year, which will obviously be poor again as a result of the lockdown. 

A number of data releases to keep an eye out for next week including inflation on Wednesday and retail sales and PMIs on Friday.


The lira is starting to stabilize around last summer’s levels again, a sign of the hard work paying off since the central bank steered itself in a new direction under the leadership of Naci Ağbal. CBRT rate decision on Thursday, no change expected.


China is closed until Thursday for the Chinese New Year. No data releases in the coming week.

PBOC is confining USD/CNY to a 6.4000/6.5000 range across the Lunar New Year holiday. 


India markets continue to rally post an expansionary budget. India’s Defense Minister announced an agreement with China to disengage forces from the Pangong Tso Lake area on the disputed border. Should be markets positive as wars are very expensive.

A fall in WPI on Monday will further alleviate stagflation fears and will boost local equities.

The Indian Rupee has rallied post the budget and an unchanged RBI pressuring USD/INR which is testing long-term support at 72.75. This has been defended by the central bank previously. A weekly close below 72.75 signals more downside by USD/INR.

Australia & New Zealand

Australian Unemployment and the RBA Minutes are this week’s data highlights, although surging gas prices, and the recovery in iron ore and copper prices are holding the local market’s attention, boosting equities and the Australian Dollar.

US Dollar weakness this week has abruptly changed the technical outlook for both the Australian and New Zealand Dollars. NZD/USD has broken out higher, and AUD/USD is testing the top of its symmetrical triangle signalling potentially strong gains next week.


Heavy data week for Japan with GDP, Industrial Production, Tankan Survey and PMI’s and inflation. GDP and Industrial Production should show a strong recovery with the overall numbers being dragged down by slow domestic consumption, highlighting the two-speed recovery. In the margins it will be equity positive with rallies driven by sentiment and momentum, as they are everywhere. 

USD./JPY has abruptly reversed direction like the Antipodeans, as US Dollar weakness returned. USD/JPY failed at its 200-day moving average at 104.65, and has fallen back to its 100-DMA at 104.40, helped along by an easing in US yields post inflation data. The Yen is being entirely driven by US Dollar movements at the moment and will remain so until the US yields stage their next large move, whichever direction that will be.

Key Economic Events

Monday, February 15th

– US financial markets are closed for Presidents Day holiday

– US President Joe Biden’s executive order reopens HealthCare.gov for a special, three-month enrollment period

– The UK’s new anti-Covid border restrictions begin to take effect.

– Euro-area finance ministers review the international role of the euro and macro-economic developments during the pandemic.

– French President Macron speaks with African leaders about counter-insurgency operations in the Sahel region.

Economic Data

Euro-area industrial production

Canada manufacturing sales

Singapore GDP

Thailand GDP

Japan GDP, industrial production

Indonesia trade

India wholesale prices, trade

Tuesday, February 16th

– 13F Filing time for large money managers.  Following the WallStreetBets Reddit army attack of big short positions by Hedge Funds, investors will pay close attention to how money managers have positioned themselves. 

– NATO Secretary General Stoltenberg holds a pre-ministerial media conference ahead of the Feb. 17-18 virtual summit of alliance defense ministers.

– Euro-area finance ministers review the bloc’s current economic situation and outlook based on the European Commission’s winter forecast.

– Singapore delivers annual budget presentation

Economic Data

US Feb Empire manufacturing: 6.0 estimate v 3.5 prior; Net TIC flows,

Euro-area Q4 Prelim GDP

German Feb ZEW survey expectations: 60.0 estimate v 61.8 prior

French unemployment

Australia central bank (RBA) minutes

Wednesday, February 17th

– European Commission unveils the bloc’s trade policy review and bio-defense program.

– German political parties hold their traditional Ash Wednesday meetings.

– Boston Fed President Rosengren takes part in a virtual panel discussion hosted by the Concord Coalition.

– NATO defense ministers hold a two-day virtual summit. Through Feb. 18.

– Fed releases minutes to the January 27th policy decision

Economic Data

US Jan Advance Retail Sales M/M: +0.8% estimate v -0.7% prior, PPI, industrial production

European car sales


Canada CPI

Japan trade, core machine orders

Singapore exports

South Africa retail sales

Thursday, February 18th

– The US House Financial Services Committee has a hearing over the Reddit-fueled stock volatility. 

– Fed Governor Brainard speaks at a climate finance summit

– ECB Executive Board member Schnabel speaks at the Chicago Booth School of Business.

– Norges Bank Governor Olsen delivers annual speech in Oslo.

– EIA crude oil inventory report

– ECB publishes its 2020 financial accounts and a review of its latest policy meeting.

Economic Data

US initial jobless claims, housing starts

Australia unemployment rate

Japan machine tool orders

Sweden CPI

Turkey central bank (CBRT) Interest Rate Decision: Expected to leave One-Week Repo unchanged at 17.00%

Friday, February 19th

– Boston Fed President Rosengren speaks at Yale Economics Development Symposium.

Economic Data

US Feb Prelim Markit Manufacturing PMI: 58.5 estimate v 59.2 prior, Jan Existing home sales: 6.56M estimate v 6.76M prior

Canada Retail Sales

UK PMI and Retail Sales

Euro-area PMIs

New Zealand PPI

Japan CPI

Australia retail sales

Sovereign Rating Updates

– Luxembourg (Fitch) 

– Turkey (Fitch)

– Switzerland (S&P)

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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