MNI GLOBAL WEEK AHEAD: Riksbank & RBA to Hike, German CPI Due

After a heavy data week across Europe and the US as well as Fed, BOE and ECB rate hikes, this coming week’s data schedule is lighter, topped by UK GDP, EZ industrial production/retail, and supplemented with the RBA and Riksbank meetings.

MONDAY

Germany Factory Orders: Factory orders are seen expanding again by 2.0% m/m in December, after the 5.3% m/m contraction recorded in December. Compared to December 2021, factory orders are expected to be down -11.8% y/y. The November collapse in demand was largely driven by foreign orders, as global demand declined due to tighter financial conditions and weak growth outlooks. China’s recent reopening measures will lift export orders, signalling a more robust start to 2023 in data to come.

Eurozone Retail Trade: December retail data is projected to confirm a weak finish to a contractive quarter, with forecasts looking for -2.5% m/m and -2.7% y/y falls. The second prelim GDP print due on Feb 14 will provide more detail on the anticipated considerable drag to eurozone consumption.

TUESDAY

RBA Rate Decision: The Reserve Bank of Australia is expected to deliver another 25bp hike on Tuesday, bringing their cash rate target by 25bp to 3.35%, after CPI surprised to the upside in Q4. Updated forecasts due this week are set to shape market pricing of the peak rate.

Germany Industrial Production: Following Friday’s French industrial production print, which saw a stronger-than-anticipated end to the year in December, outlooks for neighbouring Germany remain contractive at -0.6% m/m and -1.7% y/y in December. This will likely cancel out the French boost to the Eurozone aggregate print.

Despite remaining contractionary for a seventh consecutive month in the January PMI data, conditions moderated for a third month as easing cost pressures, supply bottlenecks and more muted recessionary fears feed into improved optimism going forward.

Spain Industrial Production: Spanish IP will also likely be a downside driver on the eurozone aggregate, with forecasts pencilling in a more muted -0.1% m/m decline in a fourth month of contraction.

US Trade Balance: The December US trade deficit is projected to deepen by around $7b to -$68.5b after having narrowed to a September 2020 low, as imports fall in the back of domestic demand declines.

WEDNESDAY

No data of note.

THURSDAY

Germany CPI: After delaying data due to technical issues, the German January HICP print is anticipated to accelerate by +1.4% m/m, after having fallen by -1.2% m/m due to substantial energy-bill subsidies. On the year, HICP is projected to accelerate by 0.5pp to +10.1% y/y, breaking a two-month streak of slowing inflation. Note: this release will be at 0700 GMT (rather than the usual prelim release time of 1300).

This data will have substantial implications for the euro area aggregate print, which cooled by 0.7pp to +8.5% y/y in the January flash estimate, calculated using a Eurostat estimate for Germany. MNI estimates the German HICP number supplied by Eurostat is likely to have been between +7.9% and +8.6% y/y in January. As such, an upside surprise to this estimate will lead to substantial revisions in the euro area final aggregate print.

Riksbank Rate Decision: The Riksbank is expected to hike rates by 50bp in the February meet, slowing the pace from the 75bp hike delivered in November. This would bring the Repo Rate to 3.00%, in line with the Riksbank’s November guidance: "the forecast shows that the policy rate will probably be raised further at the beginning of next year and then be just below 3 per cent."

FRIDAY

UK Q4 GDP / Industrial Production / Services / Trade: The December round of UK data is projected to show a contractionary end to Q4, with GDP at -0.3% m/m, IP at a modest +0.1% m/m, manufacturing down -0.2% m/m and services falling -0.3% m/m.

The Q4 preliminary GDP data due will be the main focus, whereby consensus is expecting the UK economy to stagnate at 0.0% q/q, after -0.3% q/q in Q3. The BOE’s February forecasts continue to anticipate five quarters of negative growth commencing in Q1 2023. Growth outlooks were largely seen as more stable in the short term, expected to fall -0.7% in Q1 2024 (vs -1.97% in Nov estimate) and more stagnant in the longer term as 2025 outlooks were downgraded to a meagre +0.25% (vs +0.5% in Nov).

Canada Labour Force Survey: The January Canadian labour data will likely signal continued robustness. The unemployment rate could tick up marginally from 5.0%, remaining near historic lows, whilst the change in employment will be substantially softer than the bumper +104k jobs seen in December.

Prelim Michigan Sentiment Index: The U Michigan sentiment index is forecasted to hold steady at 64.9 in the February estimate, having jumped over five points in December. Sentiment remains below the long-term average. Markets will be watching for shifts in inflation expectations, which softened by 0.5pp to +3.9% (1-year), whilst remaining sticky at +2.9% for the 5-10year outlook.

The BOE's 2023 Recession Forecast vs Previous Recessions:

Date	GMT/Local	Impact	Flag	Country	Event
06/02/2023	0030/1130	**		AU	Retail Trade
06/02/2023	0700/0800	**		DE	Manufacturing Orders
06/02/2023	0830/0930	**		EU	IHS Markit Final Eurozone Construction PMI
06/02/2023	0840/0840			UK	BOE Mann at Lamfalussy Lectures Conference
06/02/2023	0930/0930	**		UK	IHS Markit/CIPS Construction PMI
06/02/2023	1000/1100	**		EU	Retail Sales
06/02/2023	1500/1000	*		CA	Ivey PMI
06/02/2023	1630/1130	*		US	US Treasury Auction Result for 13 Week Bill
06/02/2023	1630/1130	*		US	US Treasury Auction Result for 26 Week Bill
06/02/2023	1700/1700			UK	BOE Pill Monetary Policy Report Live Q&A
07/02/2023	0001/0001	*		UK	BRC-KPMG Shop Sales Monitor
07/02/2023	0030/1130	**		AU	Trade Balance
07/02/2023	0330/1430	***		AU	RBA Rate Decision
07/02/2023	0645/0745	**		CH	Unemployment
07/02/2023	0700/0800	**		DE	Industrial Production
07/02/2023	0745/0845	*		FR	Foreign Trade
07/02/2023	0800/0900	**		ES	Industrial Production
07/02/2023	0900/0900			UK	BOE Ramsden Intro at UK Women in Economics Event
07/02/2023	1000/1000	**		UK	Gilt Outright Auction Result
07/02/2023	1015/1015			UK	BOE Pill Chairs UK Women in Economics Panel
07/02/2023	1330/0830	**		US	Trade Balance
07/02/2023	1355/0855	**		US	Redbook Retail Sales Index
07/02/2023	1430/1430			UK	BOE Cunliffe Speech at UK Finance
07/02/2023	1500/1000	**		US	IBD/TIPP Optimism Index
07/02/2023	1700/1800			EU	ECB Schnabel in Finanzwende e.V. Webinar
07/02/2023	1730/1230			CA	BOC Governor Macklem speech/press conference in Quebec City
07/02/2023	1740/1240			US	Fed Chair Jerome Powell
07/02/2023	1800/1300	***		US	US Note 03 Year Treasury Auction Result
07/02/2023	1900/1400			US	Fed Vice Chair Michael Barr
07/02/2023	2000/1500	*		US	Consumer Credit
08/02/2023	0700/0800	**		SE	Private Sector Production
08/02/2023	0900/1000	*		IT	Retail Sales
08/02/2023	0900/1000			EU	ECB Elderson Hosts Banking Supervision Press Conf on SREP
08/02/2023	1000/1000	**		UK	Gilt Outright Auction Result
08/02/2023	1200/0700	**		US	MBA Weekly Applications Index
08/02/2023	-			EU	ECB Lagarde at European Council meeting
08/02/2023	1315/0815			US	Fed Vice Chair Michael Barr
08/02/2023	1420/0920			US	New York Fed's John Williams
08/02/2023	1430/0930			US	Fed Governor Lisa Cook
08/02/2023	1500/1000	**		US	Wholesale Trade
08/02/2023	1500/1000			US	Atlanta Fed's Raphael Bostic
08/02/2023	1500/1000			NL	DNB President Klaas Knot speaks at MNI event
08/02/2023	1530/1030	**		US	DOE Weekly Crude Oil Stocks
08/02/2023	1700/1200	***		US	USDA Crop Estimates - WASDE
08/02/2023	1730/1230			US	Minneapolis Fed's Neel Kashkari
08/02/2023	1800/1300	**		US	US Note 10 Year Treasury Auction Result
08/02/2023	1830/1330			CA	BOC minutes from last rate meeting
08/02/2023	1845/1345			US	Fed Governor Christopher Waller
09/02/2023	0700/0800	***		DE	HICP (p)
09/02/2023	0830/0930	**		SE	Riksbank Interest Rate
09/02/2023	0945/0945			UK	BOE Bailey, Pill, Tenreyro & Haskel at Treasury Select Committee Hearing
09/02/2023	1330/0830	**		US	Jobless Claims
09/02/2023	1330/0830	**		US	WASDE Weekly Import/Export
09/02/2023	1530/1030	**		US	Natural Gas Stocks
09/02/2023	1800/1900			EU	ECB de Guindos Speech at Foro Economia y Humanismo
09/02/2023	1800/1300	***		US	US Treasury Auction Result for 30 Year Bond
10/02/2023	0130/0930	***		CN	CPI
10/02/2023	0130/0930	***		CN	Producer Price Index
10/02/2023	0700/0700	***		UK	GDP First Estimate
10/02/2023	0700/0700	**		UK	Index of Services
10/02/2023	0700/0700	***		UK	Index of Production
10/02/2023	0700/0700	**		UK	Output in the Construction Industry
10/02/2023	0700/0700	**		UK	Trade Balance
10/02/2023	0700/0700	**		UK	UK Monthly GDP
10/02/2023	0700/0800	*		NO	CPI Norway
10/02/2023	0900/1000	*		IT	Industrial Production
10/02/2023	1330/0830	***		CA	Labour Force Survey
10/02/2023	1400/1400			UK	BOE Pill Panellist at BIS SUERF Workshop
10/02/2023	1400/1500			EU	ECB Schnabel Twitter Q&A
10/02/2023	1500/1000	***		US	University of Michigan Sentiment Index (p)
10/02/2023	1730/1230			US	Fed Governor Christopher Waller
10/02/2023	1900/1400	**		US	Treasury Budget
10/02/2023	2100/1600			US	Philadelphia Fed's Pat Harker