Leading indicators such as US Inflation and GDP from Europe and the US dominate the releases next week. The highlight of the week is the ECB rate decision, while markets are going to remain focused on the threat Covid-19 poses.
Have a look at the most important events of the coming days in our usual weekly publication.
- Industrial Production and Trade Balance (EUR, GMT 07:00) – German Industrial Production growth is expected to have stood at 1.5% seasonally adjusted m/m in January, compared to the -3.5% decline seen in December.
- Housing Starts (CAD, GMT 12:15) – Canada’s improvement in January housing starts tracks the expected housing boost to Q1 GDP. In February, the index is expected to slip lower to 205K from 213.2K.
Tuesday – 10 March 2020
- Producer Price Index (CNY, GMT 01:30) – Chinese February PPI is expected to have remained at the same levels as in January, at 0.1% y/y.
- Consumer Price Index (CNY, GMT 01:30) – Chinese inflation is expected to drop in February as coronavirus cases soar. The overall outcome is seen at 4.9% from 5.4%, while the monthly reading should be at 0.8% from 1.4% last month.
- Gross Domestic Product (EUR, GMT 10:00) – Eurozone seasonally adjusted GDP for Q4 2019 is expected to remain unchanged on an annualized and quarterly rate.
Wednesday – 11 March 2020
- Gross Domestic Product (GBP, GMT 09:30) – The UK economy’s most important figure, GDP is expected to be lower at 0.2% m/m following the 0.3% reading for December.
- Industrial and Manufacturing Production (GBP, GMT 09:30) – The two indices are expected to have both grown to 0.4% m/m in January, with industrial production recovering significantly from the 0.1% in the prior month.
- Consumer Price Index (USD, GMT 12:30) – Expectations have been set flat for February headline CPI figure with a 0.2% core price increase, following respective January readings of 0.1% and 0.2%. As-expected February figures would result in a headline y/y increase of 2.2%, down from 2.5% in January. Core prices should set a 2.3% y/y rise for a fourth consecutive month. We have seen an up-tilt in y/y gains into Q1 of 2020 due to harder comparisons, though this lift is being capped in February and March by price weakness related to the Covid-19 outbreak.
Thursday – 12 March 2020
- ECB Interest Rate Decision and Conference (EUR, GMT 12:45 & 13:30) – The ECB is under pressure to step in as virus developments hit the markets. The ECB may have planned to focus on the strategic policy review this year, but recent market developments have increased the pressure on the central bank to act sooner rather than later to address the impact of Covid-19. There isn’t much room for rate cuts, although a 10 bp cut in the deposit rate is a possibility and now pretty widely expected. If the ECB goes down that route it will likely expand the exclusion band to limit the hit for banks. In this situation where supply disruptions are increasingly apparent, lower rates may not help much, but the move would have a signaling effect, which could help to bolster sentiment.
Friday – 13 March 2020
- Harmonized Index of Consumer Prices (EUR, GMT 07:00) – The German HICP inflation for February is seen steady at 1.7% y/y.
- Michigan Sentiment (USD, GMT 15:00) – US consumer sentiment was revised up to 101.0 in the final February print from the University of Michigan survey, versus the 100.9 in the preliminary, and it’s up 1.2 points from January’s 99.8. This is the highest since March 2018 (which was the best since January 2004). The preliminary March Michigan sentiment reading is anticipated to decline to 97. On the flip side, a better than expected report, though it’s not likely to assuage COVID-19 fears.
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Andria Pichidi
Market Analyst
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