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(M1) Bullish Focus

MNI Global Morning Briefing

MNI (London)

Tuesday kicks off with the release of the German trade balance at 0700GMT, followed by Italian industrial production at 0900GMT. In the US the highlight is the release of the job openings and labour turnover survey at 1500GMT.

German trade surplus forecast to narrow

The unadjusted German trade surplus is expected to narrow to EUR 15.0bn in December, down from EUR 17.2bn recorded in November. The seasonally adjusted trade surplus shrank in November to EUR 16.4bn as imports rose 4.7%, while exports only ticked up 2.2%. In December, seasonally adjusted exports are projected to fall by 0.8%, while markets expect imports to fall by 2.3%, leading to a decline in the adjusted trade surplus. The German composite PMI noted an upturn in new export business in January which bodes well with exports going forward.

Italian industrial output seen edging up

Industrial production in Italy is expected to rise by 0.3% on a monthly basis in December after falling by 1.4% in November. The index rebounded strongly after the initial fall in spring 2020, but the recovery eased since June and the indicator fluctuates from September onwards. Survey evidence is in line with market forecasts, indicated by the manufacturing PMI which rose to a 34-month high in January due to strong orders and output. On the other hand, Istat's manufacturing sentiment eased slightly in January due to a more pessimistic outlook, while order books continued to expand.

US JOLTS job openings expected to ease

The number of job openings is expected to ease to 6,450,000 in December, down from 6,527,000 seen in November. Job openings were little changed in November with openings declining in durable goods manufacturing, information and educational services. Hires were also little changed in November at 6,000,000, while separations rose to 5,400,000 with the layoff and discharges rate rising to 1.4%. Survey evidence suggests an improvement going forward. The ISM services PMI saw employment increase in January with firms noting plans to expand their workforce.

The events calendar throws up a quiet schedule with the highlight in terms of speakers being ECB's Philip Lane and St. Louis Fed's James Bullard.

MNI London Bureau | +44 203-865-3814 | irene.prihoda@marketnews.com