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.
Friday kicks off with the release of German producer prices and UK public sector finances, both published at 0700GMT. The highlight in the North Americas is the publication of Canadian retail trade figures at 1230GMT.
German producer price inflation seen higher
The annual PPI rose to 0.9% in January, its highest level since July 2019 and the second positive reading in a row after ten consecutive months of decline. Intermediate good prices were the main driver of January's increase, rising by 2.4% which is the largest uptick since November 2018. In February markets are looking for a marked increase to 2.0% for the annual producer price inflation, while the monthly PPI is seen 0.6pp lower at 0.8%. Survey evidence suggests that the current supply chain disruptions lead to higher purchase prices in February. Germany's manufacturing PMI reported the highest rate of cost inflation since April 2011.
UK borrowing expected to increase
Borrowing is expected to increase significantly in February to GBP 20.2bn, up from GDP 8.0bn seen in the previous month. January posted the first deficit in 10 years as tax receipts are usually higher in the first month of the year. Government tax receipts were lower than a year ago due to significant falls in taxes on production such as VAT and business rates. The recent extension of the furlough scheme and the business rates relief is likely to result in higher borrowing in the coming months.
Source: Office for National Statistics
Canadian retail sales seen falling again
Canadian retail sales dropped by 3.4% in December, showing the largest decline since April. Retail trade declined in 9 out of 11 subsectors in December, which represents 83.6% of retail sales. Excluding gasoline stations and motor vehicle dealers, sales were down 4.6%, as the pandemic lead to lower sales in general merchandise, clothing, sports goods, hobby, book and music stores. Markets are looking for another decline of retail sales by 3.3% in January, as covid-restrictions continue to weigh on consumer spending.
The main events to follow on Friday include speeches by ECB's Edouard Fernandez-Bollo and Fabio Panetta.
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.