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MNI GLOBAL WEEK AHEAD: UK & US CPI in Focus

MNI (London)
The week ahead sees key UK CPI, labour and retail data releases, with the Bank of England closely eyeing core CPI and wage developments ahead of their March meet. US CPI on Wednesday will also take centre stage, with industrial production and retail data also of note.


MONDAY

SWISS CPI: Swiss inflation is projected to reaccelerate in January, up 0.1pp to +2.9% y/y and by +0.4% m/m after having declined by -0.2% m/m in December. Despite remaining globally low, sticky inflation is of great concern to the SNB after the almost three-decade high of +3.5% y/y in August.

A substantial upside could see the SNB more inclined to hike 50bp at the March 23 meeting. At current a 25bp hike remains the more likely option.

US NY fed Survey of Consumer Expectations: The Consumer Expectations survey will provide insight into US inflation expectations ahead of the Tuesday release. The latest report saw 1y expectations fall, whilst medium-term inflation expectations failed to improve.

TUESDAY

Norway GDP: The Norwegian mainland economy is anticipated to slow into Q4, after expanding by a surprise +0.8% q/q in Q3 on the back of strong service sector activity.

UK Labour Report: All eyes will be on wages in the December/January UK labour report. December weekly earnings are forecasted to slow to 0.2pp to +6.2% 3m/yoy, whilst accelerating by 0.2pp to +6.6% 3m/yoy when including bonuses. The unemployment rate is seen stable at a tight 3.7%.

The BOE stated that both domestic price and wage pressures have outpaced expectations, implying upside risks to core CPI. According to the February MPR, a continuation of this trend would imply an active response in the Bank Rate: "If there were to be evidence of more persistent pressures, then further tightening ... would be required." The BOE sees the labour market as more robust than before, with February projections for unemployment at 5.3% by the end of the forecast period, a substantial 1.1pp downwards revision from November.

Eurozone Second GDP Flash Estimate: Eurozone Q4 prelim flash estimates recorded a +0.1% q/q GDP expansion, outpacing forecasts of a -0.1% q/q contraction. This data is likely skewed upwards marginally by the Irish print, which recorded a +3.5% q/q 'boom'. The boost from strong Irish manufacturing sector data was likely subject to multinational reporting distortions. Tuesday’s second estimate will provide updated national GDP numbers, but for further detail on the GDP components we will have to wait for the final March 8 release.

US CPI: US inflation is expected to cool further in January, slowing 0.3pp to +6.2% y/y on the headline and to 5.4% y/y on core. On December, headline is seen bouncing back to +0.5% m/m on renewed energy inflation and perhaps less of a drag from used cars although core is seen holding at 0.3% M/M. With another 25bp hike currently fully priced for the March FOMC, further upside surprises to core, especially in non-housing service components, could help cement expectations of an additional 25bp hike in May and continue the recent unwinding of 2H23 rate cuts. A new weighting methodology could however throw some additional uncertainty into the mix.

WEDNESDAY

UK Inflation Report: Inflation is seen continuing to edge down in the January data, driven by falling prices at the petrol pump. CPI is forecasted to fall by -0.4% m/m (vs +0.4% in Dec), cooling by 0.2pp to +10.3% y/y on the headline. This remains only 0.8pp below the October high, in part due to sticky energy prices enforced by energy price caps. A 0.1pp tick down on core CPI to +6.2% y/y is pencilled in as demand softens. New 2023 weightings add uncertainty to the January prints, whereby services and energy are likely to be see heavier weightings.

Spain Final CPI: Spanish January HICP is expected to be confirmed at the upside surprise of +5.8% y/y, after prices fell by -0.5% m/m, softer than the -1.9% expected. The 0.5pp jump in core CPI to +7.5% y/y remains a key concern for the ECB.

Eurozone Industrial Production: Consensus is currently looking for -0.9% m/m and -0.8% y/y January IP contraction for the bloc, implying an overall weak end to Q4. So far, a sharper contraction was recorded by Germany, which should be largely cancelled out by upside surprises in French, Spanish and today's Italian data. Volatile Irish data will this month be an additional drag on the headline print on Wednesday.

US Retail / Industrial Production: Retail sales and industrial production should rebound in January, following disruptive winter weather conditions in December and a mild start to the year, likely to boost spending and improve production. Retail sales are seen up +1.7% m/m after -1.1% m/m in December, whilst IP expands by a more modest +0.5% m/m after -0.7% m/m.

THURSDAY

US PPI: US factory-gate inflation is set to re-accelerate in January, at +0.4% m/m on final demand after cooling by -0.5% m/m in December.

FRIDAY

UK Retail: UK retail sales will likely show a January slump, projected to contract by -0.5% m/m and -5.8% y/y excluding fuel as low consumer confidence, and upcoming rises in household bills and mortgage rates continues to hamper spending appetite. UK retail recorded M/M contractions for 10 out of 12 months in 2022 and a negative contribution to Q4 GDP. Lacklustre spending outlooks remain a concern for the BOE but in line with projections.

France Final CPI: French harmonised inflation is expected to be confirmed at +0.4% m/m (after -0.1% in Dec), rising 0.3pp to +7.0% y/y in the January flash (only 0.1pp below the November high). French inflation reaccelerated in January due to the winding back of government energy support measures which saw fuel and regulated gas prices jump recently.



DateGMT/LocalImpactFlagCountryEvent
13/02/20230730/0830***CH CPI
13/02/2023-EU ECB Lagarde & Panetta at Eurogroup Meeting
13/02/20231300/0800US Fed Governor Michelle Bowman
13/02/20231630/1130*US US Treasury Auction Result for 26 Week Bill
13/02/20231630/1130*US US Treasury Auction Result for 13 Week Bill
14/02/20232350/0850***JP GDP (p)
14/02/20230700/0700***UK Labour Market Survey
14/02/20230700/0800**NO Norway GDP
14/02/20231000/1000**UK Gilt Outright Auction Result
14/02/20231000/1100***EU GDP (p)
14/02/20231000/1100*EU Employment
14/02/20231100/0600**US NFIB Small Business Optimism Index
14/02/2023-EU ECB de Guindos at ECOFIN Meeting
14/02/20231330/0830***US CPI
14/02/20231355/0855**US Redbook Retail Sales Index
14/02/20231600/1100US Dallas Fed's Lorie Logan
14/02/20231630/1130*US US Treasury Auction Result for Cash Management Bill
14/02/20231800/1300US Philadelphia Fed's Patrick Harker
14/02/20231905/1405US New York Fed's John Williams
15/02/20230700/0700***UK Consumer inflation report
15/02/20230700/0700***UK Producer Prices
15/02/20230800/0900***ES HICP (f)
15/02/20230930/0930*UK ONS House Price Index
15/02/20231000/1100**EU Industrial Production
15/02/20231000/1100*EU Trade Balance
15/02/20231200/0700**US MBA Weekly Applications Index
15/02/20231315/0815**CA CMHC Housing Starts
15/02/20231330/0830***US Retail Sales
15/02/20231330/0830**US Empire State Manufacturing Survey
15/02/20231400/0900*CA CREA Existing Home Sales
15/02/20231400/1500EU ECB Lagarde at Plenary Debate on ECB Annual Report
15/02/20231415/0915***US Industrial Production
15/02/20231500/1000*US Business Inventories
15/02/20231500/1000**US NAHB Home Builder Index
15/02/20231530/1030**US DOE Weekly Crude Oil Stocks
15/02/20231800/1300**US US Treasury Auction Result for 20 Year Bond
15/02/20232100/1600**US TICS
16/02/20230030/1130***AU Labor force survey
16/02/20230915/1015EUECB Panetta in Discussion at Centre for European Reform
16/02/20231330/0830**US Jobless Claims
16/02/20231330/0830**US WASDE Weekly Import/Export
16/02/20231330/0830***US PPI
16/02/20231330/0830***US Housing Starts
16/02/20231330/0830**US Philadelphia Fed Manufacturing Index
16/02/20231345/0845US Cleveland Fed's Loretta Mester
16/02/20231500/1600EU ECB Lane Dow Lecture at NIES London
16/02/20231530/1030**US Natural Gas Stocks
16/02/20231700/1700UK BOE Pill Fireside Chat at Warwick University Think Tank
16/02/20231800/1300**US US Treasury Auction Result for TIPS 30 Year Bond
16/02/20231830/1330US St. Louis Fed's James Bullard
16/02/20231945/2045EU ECB de Guindos Students Discussion
16/02/20232100/1600US Fed Governor Lisa Cook
16/02/20232310/1810CA BOC Deputy Beaudry speaks on "The importance of the Bank of Canada’s 2% inflation target"
16/02/20232315/1815US Cleveland Fed's Loretta Mester
17/02/20230700/0700***UK Retail Sales
17/02/20230700/0800**SE Unemployment
17/02/20230700/0800**DE PPI
17/02/20230745/0845***FR HICP (f)
17/02/20230900/1000**EU EZ Current Account
17/02/20231330/0830*CA Industrial Product and Raw Material Price Index
17/02/20231330/0830**US Import/Export Price Index
17/02/20231330/0830US Richmond Fed's Tom Barkin
17/02/20231345/0845US Fed Governor Michelle Bowman
17/02/20231500/1000*US Services Revenues

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