• Weekly briefings
• Archive

UK Data
 

• Monday 9.30am Industrial Production for January. Previous -0.1% m/m
• Monday 9.30am PPI input prices for February. Previous 2.6% m/m
• Monday 9.30am PPI Core output prices for February. Previous 0.8% m/m
• Tuesday 0.01am RICS House Price Survey. Previous -54.7 index
• Wednesday 9.30am UK Trade Balance for January. Previous £-7.6bn

A week of conflicting data for the UK. Both the CIPS Manufacturing and Services PMI surveys came in better than expected at 51.3 and 54.0 respectively, backing up the BoE view that away from the housing and financial sectors, the UK economy is still relatively strong and expanding. The Halifax House Price Survey showed further softness, declining 0.3% m/m, taking the annual rate to 4.2% y/y. Consumer confidence also slipped  to 78 from 81, but the big event of the week was the BoE leaving interest unchanged at 5.25% on Thursday. We will have to wait until the release of the minutes next week to gain an insight into their deliberations. Highlights for this week will be PPI data on Monday and RICS Housing Survey on Tuesday.

US Data

• Tuesday 12.30pm US Trade Balance for January. Previous $-58.8bn
• Tuesday 2.00pm IBD Consumer Optimism Index. Previous 44.5
• Thursday 12.30pm Import Prices for February. Previous 1.7% m/m
• Thursday 12.30pm Retail sales for February. Previous 0.3% m/m
• Friday 12.30pm CPI for February. Previous 0.4% m/m
• Friday 2.00pm University of Michigan Sentiment for March, preliminary. Previous 70.8 index

The US Dollar remained under pressure last week, with EUR/USD hitting new highs on 4 days out of 5. The ISM manufacturing survey showed a fall in activity, but the ISM services side showed an unexpected rise. The big focus for the week was the employment data. The ADP report was much weaker than expected and was a pre-cursor to Friday’s Non-Farm Payrolls which show a decline of 63k jobs against expectations of 25k jobs being created. However, the unemployment rate actually fell to 4.8% from 4.9%, so employment levels, though weakening, are not falling off a cliff as some have feared. The main data out this week is retail sales on Thursday and CPI on Friday, but market attention now really shifts to the Fed interest rate decision on the 18th March, with the Futures market pricing in the likelihood of a 75 basis point cut.

EURO Data

• Tuesday 10.00am German ZEW Economic Sentiment Survey for March. Previous -39.5
• Tuesday 10.00am Euro Zone ZEW Economic Sentiment Survey for March. Previous -41.4
• Wednesday 10.00am Industrial production for January. Previous -0.2% m/m
• Friday 10.00am Final HICP Inflation for February. Previous 3.2% y/y

The Euro again surged last week, setting new all times highs against the US Dollar. This was in part because of worries about a US recession, but also because of the data from the Euro zone pointing to increasingly high inflation and a resilient economy. The HICP inflation level came in at 3.2%, well above the ECB’s target of 2%. PPI came in at 0.8% m/m and 4.9% y/y, whilst retail sales came in at a much stronger than expected 0.4% m/m. As in the UK, the major event for the Euro zone last week was the ECB interest rate decision, with the subsequent press conference. It was no surprise that rates were left on hold with President Trichet highlighting the short term upside risks to inflation and reiterating the Bank’s mandate to ensure price stability. Euro zone interest rates look as if they will remain on hold for the foreseeable future. Very little data this week, with Tuesday’s ZEW surveys and Friday’s inflation data the main highlights.

Interest rate outlook