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France and Germany detailed GDP breakdowns plus UK labour
market statistics
Japanese production and sales data, RBOC and RBNZ rate setting
meets
The week ahead sees fresh estimates of GDP in some major
economies including the US, Germany and France, as well as some
more up to date higher frequency statistics such as US durable
goods orders, sentiment surveys and UK labour market numbers, which
will be eagerly awaited for signs of economic health early in 2021.
Policy action - or more likely a lack of it - meanwhile comes from
China and New Zealand.
The US sees a further estimate of fourth quarter GDP, which is
expected to show a slight upward revision to 4.1% from 4.0%.
However, it's the higher frequency data for the opening months of
2021 which will garner the most attention amid signs that the
economy has sustained a strong pace of expansion, even showing
signs of growth accelerating. IHS Markit's US flash PMIs showed the
strongest private sector expansion for almost six years, fueled by
surging service sector activity (buoyed in part by stimulus
cheques), and a sustained strong manufacturing expansion. Durable
goods orders are therefore expected to show strong growth, while
new homes sales are expected to have increased and consumer
sentiment likely to have improved.
In Europe, fresh detailed estimates of fourth quarter GDP are
also published for France, Germany and Portugal, plus first
estimates are released for Switzerland, Poland and Denmark. Prior
data showed France contracting by 1.3% on the three months to
December but Germany eked out a 0.1% gain. In the UK the focus is
on the labour market, with official data on employment, wages,
vacancies and joblessness released, the latter coming under
particular scrutiny amid growing calls to extend the country's
furlough scheme beyond April. Consumer and business sentiment
surveys are also released across Europe, including the IFO survey
for Germany.
In Asia Pacific, the PBOC is expected to kick off the week by
leaving its Loan Prime Rates unchanged, seeking to safeguard its
recovery path until the pandemic risks have further abated.
No change is also anticipated at the Reserve Bank of New
Zealand, according to the consensus, where the policy rate is
expected to remain at an historic low of 0.25% for some time to
come.
In Japan, official industrial production and retail sales data
will be eyed for confirmation of the divergent signals from the
surveys. The flash PMI number from au Jibun Bank/IHS Markit showed
manufacturing performing well on the back of rising exports, but
virus containment measures continued to hit services.
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.
