MNI European Morning Briefing

     LONDON (MNI) - After a busy morning yesterday, the calendar shows no sign

of let up with Germany releasing their final CPI figures at 0700GMT with prior

HCIP m/m at 0.5% and y/y at 1.2%. MNI's forecasts for y/y suggests a slight

pickup at 1.4%. 

     Spain release retail sales at 0800GMT with a prior y/y figure of 1.2%.

Italy's retail sales come out at 0900GMT and given its poor prior m/m figure of

-0.3% and y/y figure of -0.1, we shall see if a recovery is coming off the back

of this. France appears to tell a similar story to Italy with a prior q/q retail

trade figure of -0.3% and will release their retail trade figures at some point

during the day. 

     The Institute for Monetary and Financial Stability, in Frankfurt, will host

ECB President Draghi's speech at Conference "The ECB and Its Watchers XIX" at

0800GMT which will be followed on at 0845GMT by ECB Executive Board member Peter

Praet participation in Debate 1 "Assessment of Quantitative Easing and

Challenges of Policy Normalization". 

     The backdrop of the ECB's neutral attempt to ease its monetary stimulus,

the Euro Area releases its employment figures and Industrial Production at

1000GMT. Employment growth previously was at 1.7% y/y and 0.4% q/q. Industrial

Production shows some signs of strength with m/m growth at 0.4% and y/y at 5.2%.

     US Retail sales and Producer Price Index (PPI) will be simultaneously

released at 1230GMT. MNI forecasts suggest a drop in PPI from prior indicator

with Final Demand PPPI forecasted at 0.1% in comparison to a prior 0.4% and PPI

ex. food and energy is pencilled in by analysts at 0.2% compared to 0.4%

previously. Worth noting however is that this 0.4% increase previously was

above-expectation and was led by gains in a variety of categories, including

trade services.  The forecasts appear to be fairly accurate with an average miss

of 0.35 percentage points over the 20-year period as shown in figure 1 below. 

     Contrastingly, MNI forecasts angle towards retail sales recovering its

previous loss of -0.3% with growth for retail sales forecasted at 0.4% with

seasonal effects such as gasoline prices being adjusted. Again, MNI forecasts

show an average miss of 0.33 percentage points over the 20-year period as shown

in figure 2 below. 

     Business inventories (released at 1400GMT) are expected to rise 0.6% in

January. Factory inventories were already reported as up 0.3% in the month,

while wholesale inventories rose 0.8%. The advance report showed a 0.8% gain for

retail inventories. Taken together, an MNI calculation looks for a 0.6% increase

for business inventories, so the median forecast suggests analysts see a no

revision to retail inventories. The US Atlanta Fed Inflation Index will also be

released at 1400GMT with a previous figure of 3.2%. The US concludes at 1430GMT

with the US DOE Refinery Utilization and Petroleum Stocks. 

     BBK Board member Joachim Wuermeling speech at the Economic Council of the

CDU, Financial Market Meeting 2018, in Berlin commences at 1420GMT and after

this, the ECB Executive Board member Benoit Coeure participates in a panel on

'Zero interest rate policy' at CDU-Economic Council: Finanzmarktklausur, Berlin.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com