MNI GLOBAL WEEK AHEAD: UK & US CPI in Focus

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.

Date	GMT/Local	Impact	Flag	Country	Event
13/02/2023	0730/0830	***		CH	CPI
13/02/2023	-			EU	ECB Lagarde & Panetta at Eurogroup Meeting
13/02/2023	1300/0800			US	Fed Governor Michelle Bowman
13/02/2023	1630/1130	*		US	US Treasury Auction Result for 26 Week Bill
13/02/2023	1630/1130	*		US	US Treasury Auction Result for 13 Week Bill
14/02/2023	2350/0850	***		JP	GDP (p)
14/02/2023	0700/0700	***		UK	Labour Market Survey
14/02/2023	0700/0800	**		NO	Norway GDP
14/02/2023	1000/1000	**		UK	Gilt Outright Auction Result
14/02/2023	1000/1100	***		EU	GDP (p)
14/02/2023	1000/1100	*		EU	Employment
14/02/2023	1100/0600	**		US	NFIB Small Business Optimism Index
14/02/2023	-			EU	ECB de Guindos at ECOFIN Meeting
14/02/2023	1330/0830	***		US	CPI
14/02/2023	1355/0855	**		US	Redbook Retail Sales Index
14/02/2023	1600/1100			US	Dallas Fed's Lorie Logan
14/02/2023	1630/1130	*		US	US Treasury Auction Result for Cash Management Bill
14/02/2023	1800/1300			US	Philadelphia Fed's Patrick Harker
14/02/2023	1905/1405			US	New York Fed's John Williams
15/02/2023	0700/0700	***		UK	Consumer inflation report
15/02/2023	0700/0700	***		UK	Producer Prices
15/02/2023	0800/0900	***		ES	HICP (f)
15/02/2023	0930/0930	*		UK	ONS House Price Index
15/02/2023	1000/1100	**		EU	Industrial Production
15/02/2023	1000/1100	*		EU	Trade Balance
15/02/2023	1200/0700	**		US	MBA Weekly Applications Index
15/02/2023	1315/0815	**		CA	CMHC Housing Starts
15/02/2023	1330/0830	***		US	Retail Sales
15/02/2023	1330/0830	**		US	Empire State Manufacturing Survey
15/02/2023	1400/0900	*		CA	CREA Existing Home Sales
15/02/2023	1400/1500			EU	ECB Lagarde at Plenary Debate on ECB Annual Report
15/02/2023	1415/0915	***		US	Industrial Production
15/02/2023	1500/1000	*		US	Business Inventories
15/02/2023	1500/1000	**		US	NAHB Home Builder Index
15/02/2023	1530/1030	**		US	DOE Weekly Crude Oil Stocks
15/02/2023	1800/1300	**		US	US Treasury Auction Result for 20 Year Bond
15/02/2023	2100/1600	**		US	TICS
16/02/2023	0030/1130	***		AU	Labor force survey
16/02/2023	0915/1015			EU	ECB Panetta in Discussion at Centre for European Reform
16/02/2023	1330/0830	**		US	Jobless Claims
16/02/2023	1330/0830	**		US	WASDE Weekly Import/Export
16/02/2023	1330/0830	***		US	PPI
16/02/2023	1330/0830	***		US	Housing Starts
16/02/2023	1330/0830	**		US	Philadelphia Fed Manufacturing Index
16/02/2023	1345/0845			US	Cleveland Fed's Loretta Mester
16/02/2023	1500/1600			EU	ECB Lane Dow Lecture at NIES London
16/02/2023	1530/1030	**		US	Natural Gas Stocks
16/02/2023	1700/1700			UK	BOE Pill Fireside Chat at Warwick University Think Tank
16/02/2023	1800/1300	**		US	US Treasury Auction Result for TIPS 30 Year Bond
16/02/2023	1830/1330			US	St. Louis Fed's James Bullard
16/02/2023	1945/2045			EU	ECB de Guindos Students Discussion
16/02/2023	2100/1600			US	Fed Governor Lisa Cook
16/02/2023	2310/1810			CA	BOC Deputy Beaudry speaks on "The importance of the Bank of Canada’s 2% inflation target"
16/02/2023	2315/1815			US	Cleveland Fed's Loretta Mester
17/02/2023	0700/0700	***		UK	Retail Sales
17/02/2023	0700/0800	**		SE	Unemployment
17/02/2023	0700/0800	**		DE	PPI
17/02/2023	0745/0845	***		FR	HICP (f)
17/02/2023	0900/1000	**		EU	EZ Current Account
17/02/2023	1330/0830	*		CA	Industrial Product and Raw Material Price Index
17/02/2023	1330/0830	**		US	Import/Export Price Index
17/02/2023	1330/0830			US	Richmond Fed's Tom Barkin
17/02/2023	1345/0845			US	Fed Governor Michelle Bowman
17/02/2023	1500/1000	*		US	Services Revenues