PRIOR WEEK & COMING WEEK MARKET DRIVERS
Big Themes By Region/Country: US, UK Central Bank, Advanced GDP Key
In addition to those mentioned above, watch for:
Tuesday-Retail Sales: The two key metrics the Fed is using for setting its policy are the US jobs and consumer spending data. Both must improve before the Fed will consider backing off of stimulus and raising rates.
Tuesday – a batch of EU and German preliminary GDP and sentiment reports, as well as a meeting of EU finance ministers that is usually a non event but potentially could be used to announce new steps to head off further spikes in PIIGS bonds rates
Tuesday’s the day for the UK, with both the BoE Inflation Letter and CPI data. These are critical to the near term fate of the GBP, which has been strong in recent weeks solely due to speculation that rising inflation will force the BoE to raise interest rates, despite the still tentative status of the UK’s recovery. Indeed, last month’s GDP contraction means that the UK is one GDP report away from being in official recession, so we believe the BoE will err on the side of caution and continue its policy of avoiding rate increases until the economy improves. It has held that inflation is temporary and that once austerity measures are fully felt in the UK inflation will back off to the targeted 2%.
It is believed that if inflation is above 4% the BoE may be forced to move up rate hikes, but we doubt it. The recent rise in sales taxes will likely be partly blamed for inflationary pressures.
Monday – China trade balance: China remains the world’s chief engine of growth and is thus an indicator for the global economies’ prospects.
Tuesday – Consumer Price Index and Producer Price Index: Markets have been sensitive to Chinese inflation data because it’s seen as a leading indicator of China’s tightening of its money supply, which is supposed to mean future slowing Chinese growth, which would be bearish for the global economy. Higher Chinese inflation tends to send markets lower, even though Chinese growth has remained robust despite months of efforts to cool China’s economy.
Highlights By Region In Chronological Order
Key events in BoldfaceUNITED STATES
Monday – Fed’s Dudley speaks at regional economic briefing
Tuesday – Feb. Empire Manufacturing, Jan. Import Price Index, Jan. Advance Retail Sales, Dec. TIC Flows, Dec. Business Inventories, Feb. NAHB Housing Market Index
Wednesday – Feb. 11 MBA Mortgage Applications, Jan. Housing Starts, Jan. Building Permits, Jan. PPI, Jan. Industrial Production, Jan. Capacity Utilization, FOMC Meeting Minutes
Thursday- Jan. CPI, Weekly Jobless Claims, Jan. Leading Indicators, Feb. Philly Fed, Bernanke testifies on Dodd-Frank
Friday – Bernanke speaks on global imbalances in Paris.
Monday – Dec. Industrial Production, EU finance ministers meeting in Brussels
Tuesday – Q4 Advanced GDP, Feb. ZEW Survey of Economic Sentiment, Dec. Trade Balance, German 4Q Prelim. GDP, German ZEW Surveys
Thursday – Feb. Adv. Consumer Confidence Friday – Jan. Producer Prices.
Tuesday – Dec. DCLG UK House Prices, Jan. CPI, Jan. Retail Price Index, Jan. RPI, Bank of England Inflation Report
Wednesday – Jan. Claimant Count Change, Jan. Jobless Claims Change, Dec. ILO Unemployment Rate,
Friday – Jan. Retail Sales
Sunday – 4Q Prelim. GDP Monday – Dec. F. Industrial Production, Dec. F. Capacity Utilization
Tuesday – BOJ Target Rate, Jan. F. Machine Tool Orders, Dec. Tertiary Industry Index
Wednesday – Jan. Leading Indicators, Dec. International Securities Transactions, Dec. Manufacturing Sales Thursday – Dec. Wholesale Sales
Friday – Jan. Consumer Price Index, Jan. BoC CPI Core
AUSTRALIA & NEW ZEALAND
Sunday – Australia Dec. Home Loans, NZ 4Q Retail Sales
Monday – Australia Reserve Bank’s Board February Minutes
Tuesday – Australia Dec. Westpac Leading Index, Australia Feb. DEWR Skilled Vacancies, Jan. New Motor Vehicle Sales
Wednesday – RBA’s Lowe gives speech on 2011 Economics in Sydney, NZ Jan. Business PMI, NZ 4Q Producer Prices Inputs & Outputs, NZ Finance Minister English Speaks
Feb. 10-15 – Money Supply (M2) Sunday – Jan. Trade Balance, Jan. Exports & Imports, Monday – Jan. Producer Price Index Thursday – Conference Board China December Leading Economic Index.
For a full listing of calendar events, their relative importance, previous and forecasted results, see www.forexfactory.com >> calendar tab.
DISCLOSURE & DISCLAIMER: AUTHOR SHORT THE EUR FOR PERSONAL PORTFOLIO. THE ABOVE IS FOR INFORMATIONAL PURPOSES ONLY AND NOT TO BE CONSTRUED AS SPECIFIC TRADING ADVICE. RESPONSIBILITY FOR TRADE DECISIONS IS SOLELY WITH THE READER