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The main data events to look out for Tuesday include Italian industrial production figures at 0900GMT, followed the final print of EZ GDP at 1000GMT. In the US, the release of the NFIB small business optimism index at 1100GMT is worth noting.
Italian industrial production forecast to recover
Industrial output in Italy is forecast to rebound to 0.8% in January following December's 0.2% decline. December's drop was mainly driven by a sharp decline of textile and leather manufacturing, an industry which particularly struggled during the pandemic as demand in this sector remains low. Nevertheless, the Italian manufacturing PMI rose to a 37-month high in February with new orders, production and employment rising sharply, signalling solid growth in the manufacturing sector. The report also noted supply chain disruptions which pushed input prices up. Moreover, Istat's manufacturing confidence index improved as well in February.
Final EZ GDP seen in line with flash result
Markets are looking for an unchanged reading for the final print of Q4 EZ GDP. The flash estimate of GDP was revised up slightly to -0.6% q/q from its preliminary flash estimate of -0.7%. Annual flash GDP registered at -5.0% in Q4, slightly better than the preliminary result of -5.1%. The final estimate will provide a detailed break-down of GDP, which is likely to show that household consumption took the largest hit, falling by 2.9% q/q, as many countries renewed their strict restrictions when the second wave hit the eurozone. Among the member states, Austria (-4.3%), Italy (-2.0%) and France (-1.3%) showed the largest quarterly declines, while Cyprus (+1.4%), Lithuania (+1.2%) and Latvia (+1.1%) posted the biggest gains.
Source: Eurostat
NFIB Small Business Index seen higher
The NFIB small business optimism index fell to 95.0 in January, registering below the 47-year average of 98. Business owners expecting better conditions in the next six months dropped to the lowest level since November 2013, signalling that businesses are concerned about future conditions and sales. In February, markets are looking for a small uptick to 96.3, which would be a three-month high.
The events calendar remains quiet on Tuesday with the only speech scheduled being one by Dallas Fed's Rob Kaplan.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.