Disinflation trends are struggling and now Wall Street will look to see if improving manufacturing and service activity will further fuel pricing pressures. On Monday, durable goods data for January is expected to show higher borrowing costs are hurting manufacturers. Wall Street will also get a couple of Fed regional surveys from Dallas and Richmond. Traders will pay close attention to Wednesday’s ISM manufacturing report and Friday’s Services Index.
Central bank speak will be closely monitored, especially new Fed member Goolsbee’s comments on Tuesday. Jefferson will speak on inflation and the dual mandate on Monday, while Waller will talk about the outlook on Thursday. On Friday, we will hear from Logan, Bostic, and Bowman.
US President Biden will also host German Chancellor Scholz at the White House. Traders will look to see if they announce any new efforts to support Ukraine or sanctions against Russia.
Earnings season continues with key updates from Bayer, Berkshire Hathaway, Broadcom, Budweiser Brewing Co. Apac, Costco Wholesale, CRH, Dell Technologies, Dollar Tree, HP, Kroger, Kuehne + Nagel International, Lowe’s, Merck, National Bank of Canada, Occidental Petroleum, Salesforce, Toronto-Dominion Bank, VMware, and Workday.
Next week offers a number of economic data points, the most notable of which will be the flash HICP readings. While headline inflation has been falling, core remains at the peak and policymakers are unlikely to ease off the brake until they’re seeing progress on this front. Forecasts suggest it’s still a little early for that. Markets are still pricing in a 50 basis point hike at the meeting in March although there’s an almost equal chance of 75, based on current rates.
Which brings us nicely to the central bank speak, kicking off with President Lagarde who’s due to appear at the G20 conference over the weekend.
It’s all a bit calm next week, with central bank appearances the most notable thing on the calendar. That includes Governor Bailey on Wednesday and Chief Economist Pill on Thursday. With 25 basis points almost entirely priced in for March and the committee clearly a little divided on the correct path going forward, I’m not sure what they could say that would cause much of a shock at this point.
Unemployment is expected to have jumped to 4% in January, from 3.7% the month before. Meanwhile PMIs on manufacturing and services on Wednesday and Friday, respectively, will be eyed.
A quiet week in store with unemployment the only notable release.
The CBRT cut rates last week by an unusually modest 50 basis points, taking the repo rate to 8.5%. Inflation remains extraordinarily high, with the official rate released by the Turkish Statistical Institute, sitting at 57.68%. The February reading will be released on Friday, while GDP data is due on Tuesday.
A selection of data points will be eyed this upcoming week which should give an up-to-date view on the state of the economy. The week will start with GDP data on Tuesday for the fourth quarter, alongside the KOF indicator for February. This will be followed by retail sales for January and the manufacturing PMI for February on Wednesday.
The official manufacturing and non-manufacturing PMIs for January will be released on Wednesday, in what will otherwise be a relatively quiet week. Of course, all eyes are on the transition and how quickly and strongly the economy will bounce back, with stimulus measures over the next couple of months likely to turbo-charge the recovery.
GDP and PMI data eyed next week, with the economy seen performing strongly again in the third quarter and surveys indicating ongoing optimism.
Australia & New Zealand
The RBNZ’s first interest rate meeting of the year last week was in line with market expectations of another 50 basis point hike. The central bank minutes mentioned that a potential recession in the second quarter of this year might occur, putting pressure on the New Zealand dollar.
Focus this week will be on Australian retail sales data for January and GDP for the fourth quarter, and New Zealand retail sales for the fourth quarter.
According to Japanese lawmakers, BOJ Governor nominee Kazuo Ueda is to speak in the upper house on 27 February, and deputy governor nominees are to appear in the upper house on 28 February. Ueda will attend the hearing at the National Diet and give a speech, which may have an impact on Japanese markets.
Retail Sales and the Tokyo core CPI will be in focus next week.
Retail sales and the February PMI survey are the only releases of note.
Saturday, Feb. 25
Berkshire Hathaway reports earnings
G-20 finance ministers and central bank governors conclude meetings
Sunday, Feb. 26
German Chancellor Scholz meets with Indian PM Modi
Japan’s ruling LDP holds its annual convention
Monday, Feb. 27
US durable goods
Eurozone economic confidence, consumer confidence
Hong Kong trade
Japan BOJ outright bond purchases
US Congress returns after a recess
US Treasury Secretary Yellen talks with President Zelenskiy
ECB chief economist Lane speaks on “Macro-Financial Stability in the EU”
ECB’s de Cos speaks at EIB event in Luxembourg
BOE’s Broadbent speaks at a digital technologies conference in London
Tuesday, Feb. 28
US wholesale inventories, Conference Board consumer confidence
Australia current account, retail sales
France CPI, GDP
Japan industrial production, retail sales
Mexico international reserves
South Africa unemployment, trade balance
Chevron investor day
Mayoral election in Chicago
New Fed member Goolsbee speaks at Ivy Tech Community College
BOE chief economist Huw Pill makes closing remarks at digital technologies conference
BOE’s Mann and ECB’s Vujcic speak at the EIB forum in Luxembourg
Earnings from Target
Wednesday, March 1
US construction spending, ISM Manufacturing, light vehicle sales
China manufacturing PMI, non-manufacturing PMI, Caixin manufacturing PMI
European Manufacturing PMIs: Eurozone, Germany, France, and the UK
Germany CPI, unemployment
India Manufacturing PMI
New Zealand building permits
Start of the annual Conservative Political Action Conference (CPAC)
Bundesbank publishes annual report
BOJ’s Nakagawa speaks in Fukushima
BOE Governor Bailey speaks at a conference focused on the cost of living crisis
ECB’s Villeroy speaks at the French National Assembly’s finance committee
ECB’s Visco speaks in Frankfurt
Earnings reports from Dollar Tree, Kohl’s, Salesforce, and Lowe’s
Thursday, March 2
Australia building approvals
Eurozone CPI, unemployment
Hong Kong retail sales
Italy CPI, unemployment
Japan capital spending
South Korea industrial production
Sri Lanka rate decision
US initial jobless claims
Bloomberg Intelligence’s Market Structure event in New York. Speakers include Securities and Exchange Commission Chair Gary Gensler and NYSE COO Michael Blaugrund
The due date for the DOJ’s amicus brief with its view on Donald Trump’s claim that he should get absolute immunity against civil lawsuits seeking to hold him liable for the Jan. 6, 2021 attack on the US Capitol
ECB publishes accounts of February policy meeting
Bank of Japan board member Hajime Takata gives speech in Kanagawa
BOE chief economist Huw Pill speaks on the economic outlook
Retail earnings continue with Macy’s, Costco, and Nordstrom all reporting
Friday, March 3
US President Biden and German Chancellor Scholz meet at the White House
China Caixin services PMI
Czech Republic GDP
Eurozone Services PMI, PPI
France industrial production
Japan unemployment, Tokyo CPI
Singapore retail sales
ECB’s Vasle and Muller speak on inflation
Italian PM Meloni visits Abu Dhabi
BOE’s Hauser speaks at a workshop on market dysfunction hosted by the Initiative on Global Markets in Chicago
Sovereign Rating Updates
Czech Republic (Fitch)
European Union (DBRS)
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