• Weekly briefings
• Archive

 UK Data 

• Monday 9.30am PPI Input for December. Previous 1.7% m/m
• Monday 9.30am PPI Output for December. Previous 0.1% m/m & 4.5% y/y
• Tuesday 12.01am RICS House Prices for December. Previous -40.6 index
• Tuesday 9.30am CPI for December. Previous 0.3% m/m & 2.1%
• Wednesday 9.30am Average Earnings for November. Previous 4.0% 3m Avg
• Wednesday 9.30am Claimant Count Unemployment Change for December. Previous -11.1k
• Friday 9.30am Retail Sales for December. Previous 0.4% m/m & 4.4% y/y

Sterling plunged lower against the Dollar and Euro last week, despite news that the Bank of England decided to keep interest rates on hold at 5.5% for January. The decision was regarded to be a tight call and it is now widely acknowledged that rates will be cut next month. The BoE has come under increasing pressure as a raft of high profile high street retailers have announced disappointing sales over the crucial Christmas period. Pressure from weak industrial and manufacturing production figures dragged Sterling to an all time low against the Euro and a 10 month low against the Dollar. This week’s data calendar focuses on the domestic inflationary picture; indicating how significant the effects of rising fuel and commodity prices have affected the UK economy. Tuesday’s release of the comprehensive RICS house prices will be of interest, in relation to last weeks Halifax house prices recovery, while official retail sales data should provide a detailed analysis of high street activity over the Christmas period.

US Data 

• Tuesday 1.30pm EmpireState Survey for January. Previous 10.3 index
• Tuesday 1.30pm PPI for December. Previous 3.2% m/m
• Tuesday 1.30pm Retail Sales for December. Previous 1.2% m/m 
• Wednesday 1.30pm CPI for December. Previous 0.8%m/m
• Wednesday 2.15pm Industrial Production for December. Previous 0.3%m/m
• Wednesday 2.00pm Treasury International Capital System (TICS) for November. Previous $114bn
• Thursday 1.30pm Housing Starts & Building Permits for December.  Previous 1187k & 1162k
• Thursday 5.00pm Philadelphia Fed Survey for January. Previous -5.7 index
• Friday 3.00pm University of Michigan Consumer Sentiment Survey for January. Previous 75.5 index

Last week brought news that both Merrill Lynch and Goldman Sachs stated the US economy will enter recession this year, or that in fact a recession may have already arrived. This pessimism was echoed as the US housing markets showed little sign of recovery; with pending home sales slipping further in November. Poor housing data coupled with weak manufacturing, services and dismal unemployment figures earlier in the month, have put heavy emphasis on the Fed’s interest rate announcement on the 30^th January. In a busy week regarding US data, the market will be focused on how inflation has reacted to a succession of interest rate cuts in the final quarter of 2007. While retail sales for the Christmas period will gauge how significant the US slowdown has affected the high street.

EU Data 

• Monday 10.00am Industrial Production for November. Previous 0.4% m/m
• Tuesday 10.00am German ZEW Survey (Economic Sentiment) for January. Previous -37.2 index
• Wednesday 10.00am HICP Core (Flash Estimate) for December. Previous 1.9% y/y
• Wednesday 10.00am HICP (Flash Estimate) for December. Previous 0.5% m/m & 3.1% y/y
• Thursday 10.00am Trade Balance (nsa) for November. Previous €6.1 bn

Last weeks data releases were largely overshadowed by the ECB interest rate decision on Thursday, where rates were kept on hold at 4.0%. Trichet, the ECB President, commented in the following news conference, that there were still upside risks to inflation despite a slowing economy, thus strengthening the Euro; breaching 75p against Sterling. Retail sales data defied market expectations of a rise by falling 0.5% m/m; coinciding in line with weak economic and consumer sentiment. The ECB’s preoccupation with inflation will be addressed this week, as Flash estimates provide a sense of inflationary direction into 2008.

Interest rate outlook