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The following is an extract from IHS Markit's latest Week
Ahead Economic Preview. For the full report (including Special
Reports) please click on the link at the bottom of the
article.
US industrial production, retail sales and CPI
US Fed semi-annual testimony
GDP updates for the UK and Germany
Japan GDP and New Zealand rate decision
Key releases include GDP numbers for Japan, the UK and Germany,
which look set to show both European economies avoided sliding into
contraction, but that Japan slipped into decline. Industrial
production, retail sales and inflation data are released for the
US, while policy action comes from New Zealand. US Fed chair Powell
will also give the semi-annual testimony.
The US earnings season meanwhile continues with 488 companies
reporting (including PepsiCo; Nvidia; Cisco systems; CME group,
Adidas and Astrazeneca), as do the US primaries. Markets will of
course also be eager to assess novel coronavirus developments.
Global growth hit a ten-month high in January, but that was prior
to the virus outbreak. Analysts are keen to get more information on
the scale and impact of the virus before updating 2020 growth
forecasts.
With manufacturing representing a weak link in the recent
performance of the US economy (factory output fell 0.3% in the
fourth quarter), official production updates for January will be
important to gauge growth momentum at the start of the first
quarter. Retail sales data will meanwhile provide an important
further steer on GDP trends, while inflation numbers will help
guide markets on upcoming FOMC decisions. A solid retail sales
trend will be needed to reassure on continuing robust GDP growth at
the start of the first quarter, while inflation should start to
firm in coming months to meet FOMC expectations.
In Europe, fourth quarter GDP releases for the UK and Germany
are expected to show downturns have been narrowly avoided, while
Eurozone industrial production numbers will be eyed for
confirmation of the recent green shoots seen in the January PMI
data.
In Asia Pacific, Japan's fourth quarter GDP may well show the
economy sliding into a downturn as weakened demand resulting from
the sales tax hike was exacerbated by typhoon disruptions. Indian
economic statistics will also garner attention following the recent
budget announcement. Malaysia will also publish fourth quarter GDP
performance while New Zealand will decide on monetary policy. The
Reserve Bank is expected to remain on hold but may sound more
hawkish after a recent rise in inflation.
Purchasing Managers' Index™ (PMI™) data are compiled by IHS Markit for more than 40 economies worldwide. The monthly data are derived from surveys of senior executives at private sector companies, and are available only via subscription. The PMI dataset features a headline number, which indicates the overall health of an economy, and sub-indices, which provide insights into other key economic drivers such as GDP, inflation, exports, capacity utilization, employment and inventories. The PMI data are used by financial and corporate professionals to better understand where economies and markets are headed, and to uncover opportunities.
