MNI GLOBAL MORNING BRIEFING: Sentiment Readings in Focus

Tuesday’s data schedule sees UK PSF numbers and the final Italian CPI print in the morning, as well as sentiment indicators for Germany, the UK and US throughout the day.

UK Public Sector Finances (0700 GMT)

Public sector net borrowing is projected to be at GBP -4.2bln in January. In addition to the usual January inflow of income tax, government receipts could also be lifted by a continued recovery in corporate tax receipts, which rose to GBP5.5 billion in December, the highest for any month on record. Corporate tax receipts were less than GBP 4 billion in January of 2021. However, debt interest costs will be carefully eyed, as inflation is set to send the cost soaring.

German IFO Business Climate Seen Higher (0900 GMT)

Following on from yesterday’s PMI data, Germany's ifo business climate survey is expected to tick up to 96.5, with strengthening industrial activity seen a key driver as the supply chain issues of recent months gradually ease. The current assessment is expected to improve, edging upwards to 96.5 from 96.1, whilst the future expectations index is looking to recover to 96.1 from 95.2 last month. As Covid cases fall and pandemic-related restrictions are lifted, the German economy looks to recover largely on the back of the service industry. Inflationary pressures and concerns regarding the Ukrainian-Russian border present notable downside risks.

Italy Final January Inflation to Confirm Flash (0900 GMT)

The flash estimates are expected to be confirmed in the final January inflation print for Italy, confirming HICP at +5.3% y/y. This would confirm a substantial 1.1% jump from December, underpinned by annualised energy inflation growing to +38.6% y/y in January, almost 10% higher than in December.

UK CBI Industrial Trends Seen Higher (11100 GMT)

This morning’s industrial trends survey will provide a snapshot of the health of the UK manufacturing sector. Both total orders and selling prices are projected to improve in the February report, with new orders to inch up one point to 25, just below the November high and selling prices increasing by two points to 68. Easing supply-chain pressures will be pushing the index up, despite the industry continuing to grapple with the largest cost inflation in almost forty years.

US Services/Manufacturing/Composite Flash PMIs – Upside Surprised in Services Likely (1445 GMT)

Following yesterday’s strong Eurozone/UK PMIs which highlighted a substantial boost in the service sector, the US is due to follow suit. The consensus is anticipating a mild 0.5 point improvement in manufacturing, pulling the manufacturing PMI up to 56.0 for the flash February reading. Services are expected to increase to 53.0 from 51.2 last month, however, a strong upside surprise is likely following yesterday’s Eurozone/UK PMI surprises.

US Consumer Confidence to Dampen (1500 GMT)

US consumer confidence is likely to slide in February, currently seen dampening to 110.0 from 113.8 in January. Easing Covid numbers are expected to be outweighed by inflationary concerns particularly regarding fuel and food in the US, ultimately leading to a slump in consumer confidence.

Tuesday’s key policymaker appearances include the BOE’s Dave Ramsden speaking at the National Farmers Union and the Atlanta Fed’s Raphael Bostic at Duke University. Where available, links are in the calendar below.

Date	GMT/Local	Impact	Flag	Country	Event
22/02/2022	0700/0700	***		UK	Public Sector Finances
22/02/2022	0900/1000	***		DE	IFO Business Climate Index
22/02/2022	0900/1000	**		IT	Italy Final HICP
22/02/2022	1045/1045			UK	BOE Ramsden speech at National Farmers Union
22/02/2022	1100/1100	**		UK	CBI Industrial Trends
22/02/2022	1330/0830	**		US	Philadelphia Fed Nonmanufacturing Index
22/02/2022	1355/0855	**		US	Redbook Retail Sales Index
22/02/2022	1400/0900	**		US	S&P Case-Shiller Home Price Index
22/02/2022	1400/0900	**		US	FHFA Home Price Index
22/02/2022	1400/0900	**		US	FHFA Quarterly Price Index
22/02/2022	1400/1500	**		BE	BNB Business Sentiment
22/02/2022	1445/0945	***		US	IHS Markit Manufacturing Index (flash)
22/02/2022	1445/0945	***		US	IHS Markit Services Index (flash)
22/02/2022	1500/1000	***		US	Conference Board Consumer Confidence
22/02/2022	1500/1000	**		US	Richmond Fed Survey
22/02/2022	1630/1130	**		US	NY Fed Weekly Economic Index
22/02/2022	1630/1130	*		US	US Treasury Auction Result for 26 Week Bill
22/02/2022	1630/1130	*		US	US Treasury Auction Result for 13 Week Bill
22/02/2022	1800/1300	**		US	US Treasury Auction Result for 52 Week Bill
22/02/2022	1800/1300	*		US	US Treasury Auction Result for 2 Year Note
22/02/2022	2030/1530			US	Atlanta Fed's Raphael Bostic