MNI GLOBAL WEEK AHEAD: US CPI in Focus

MONDAY

Germany Industrial Production: German industrial production is seen inching up by a marginal +0.2% m/m in November, after a shallow -0.1% m/m contraction in October and production stalling compared to October 2021. A downside tail risk exists following Friday’s factory orders, which dived -5.3% m/m in November, markedly more severe than anticipated and signalling a July 2020 low.

The collapse in demand was largely driven by foreign orders, which will likely feed through into weaker year-end production levels.

Eurozone Unemployment: The euro area unemployment rate is forecasted to hold steady at the record low of 6.5% in the November data as the bloc continues to experience a record-tight labour market. This comes despite slowing growth as many eurozone economies teeter on the edge of recession into year-end. Yet PMI surveys suggest that rate of hiring has recently moderated, with construction in particular recording continued layoffs. For now, the employment outlook remains robust, providing confidence in the ECB’s plan for further rate hikes (albeit at a lower 50bp rate).

TUESDAY

France Industrial Production: After the downside surprise -2.6% m/m, -2.7% y/y slide in French IP in October, a more modest-1.0% m/m contraction is pencilled in for November. Mining and energy are driving the decline, whilst manufacturing and transport sectors also appear to be standing on shaky legs. Spanish industrial production due shortly after will complete the bulk of relevant IP prints ahead of Friday’s euro-area aggregate release.

US NFIB Small Business Optimism: NFIB small business optimism is expected to edge down by 0.4 points to 91.5 in December from the six-month high recorded in November. The indicator remains depressed, having hovered around 98 points this time last year. Easing inflation pressures have been boosting optimism for small businesses, yet high costs and labour shortages continue to signal recession.

WEDNESDAY

No data of note.

THURSDAY

US CPI: US headline inflation is set to ease further in the December data, with prices expected to stall on the month and moderate by 0.6pp to +6.5% y/y, with the drop in gasoline prices alongside softer energy prices providing relief. Core inflation remains a key focus ahead of the FOMC meeting at the end of the month. Core is largely anticipated to soften by 0.3pp to +5.7% y/y.

Service price inflation has been highlighted to be of concern to the Fed in recent rhetoric and is heavily weighted in the core PCE basket. The persistent tightness of the US labour market signals little relief for wage cost inflation.

FRIDAY

UK Monthly GDP/Services/Industrial Production/Trade: The UK’s round of November data is due on Friday and will signal continued weakness into Q4. Industrial production, manufacturing, services and construction are all anticipated to contract on the month by around -0.3%, feeding into monthly GDP estimated at -0.3% m/m after the +0.5% m/m uptick recorded in October. The BOE December DMP Survey saw UK GDP revised lower with manufacturing and electricity generation notably weaker than previously estimated.

France & Spain Final HICP: Final December inflation prints for France and Spain should confirm easing headline CPI, whilst core inflation continued to edge up.

Eurozone Industrial Production: Following a slew of national prints, industrial production is projected to expand by +0.5% m/m and y/y in November for the bloc. This is an improvement from the -2.0% m/m fall in October, yet weaker November 2021 levels. Note that Irish data due on Monday will likely again distort the aggregate data, due to recently high volatility related to transfer pricing by multinational corporations. As such, headline eurozone data should be interpreted with this in mind.

US Prelim Michigan Index: Wrapping up the week will be the January U Michigan prelim sentiment index for January. A 0.8-point improvement to 60.5 is expected by consensus, whilst inflation expectations for both 1-year and 5-10-year will likely hold steady at +4.4% and +2.9%.

Date	GMT/Local	Impact	Flag	Country	Event
09/01/2023	0645/0745	**		CH	Unemployment
09/01/2023	0700/0800	**		DE	Industrial Production
09/01/2023	0745/0845	*		FR	Foreign Trade
09/01/2023	1000/1100	**		EU	Unemployment
09/01/2023	-			UK	House of Commons Returns
09/01/2023	1330/0830	*		CA	Building Permits
09/01/2023	1530/1530			UK	BOE Pill Speech at NYU Money Market Association
09/01/2023	1600/1100	**		US	NY Fed survey of consumer expectations
09/01/2023	1630/1130	*		US	US Treasury Auction Result for 13 Week Bill
09/01/2023	1630/1130	*		US	US Treasury Auction Result for 26 Week Bill
09/01/2023	1730/1230			US	Atlanta Fed's Raphael Bostic
09/01/2023	2000/1500	*		US	Consumer Credit
10/01/2023	0001/0001	*		UK	BRC-KPMG Shop Sales Monitor
10/01/2023	0700/0800	*		NO	CPI Norway
10/01/2023	0700/0800	**		SE	Private Sector Production
10/01/2023	0745/0845	*		FR	Industrial Production
10/01/2023	0800/0900	**		ES	Industrial Production
10/01/2023	0930/0930			UK	BOE Governor Bailey at Riksbank conference
10/01/2023	1000/1000	**		UK	Gilt Outright Auction Result
10/01/2023	1010/0510			CA	Governor Macklem at Riksbank Conference
10/01/2023	1010/1110			EU	ECB's Isabel Schnabel at Riksbank conference
10/01/2023	1010/1910			JP	BOJ Governor Haruhiko Kuroda at Riksbank conference
10/01/2023	1100/0600	**		US	NFIB Small Business Optimism Index
10/01/2023	1355/0855	**		US	Redbook Retail Sales Index
10/01/2023	1400/0900			US	Fed Chair Jerome Powell at Riksbank conference
10/01/2023	1400/1500			DE	Buba Vice President Claudia Busch as Riksbank conference
10/01/2023	1500/1000	**		US	IBD/TIPP Optimism Index
10/01/2023	1500/1000	**		US	Wholesale Trade
10/01/2023	1800/1300	***		US	US Note 03 Year Treasury Auction Result
11/01/2023	0030/1130	**		AU	Retail Trade
11/01/2023	0900/1000	*		IT	Retail Sales
11/01/2023	1200/0700	**		US	MBA Weekly Applications Index
11/01/2023	1530/1030	**		US	DOE weekly crude oil stocks
11/01/2023	1800/1300	**		US	US Note 10 Year Treasury Auction Result
12/01/2023	0030/1130	**		AU	Trade Balance
12/01/2023	0130/0930	***		CN	Producer Price Index
12/01/2023	0130/0930	***		CN	CPI
12/01/2023	0700/0800	**		NO	Norway GDP
12/01/2023	1230/0730			US	Philadelphia Fed's Patrick Harker
12/01/2023	1330/0830	**		US	Jobless Claims
12/01/2023	1330/0830	**		US	WASDE Weekly Import/Export
12/01/2023	1330/0830	***		US	CPI
12/01/2023	1530/1030	**		US	Natural Gas Stocks
12/01/2023	1630/1130			US	St. Louis Fed's James Bullard
12/01/2023	1700/1200	***		US	USDA Crop Estimates - WASDE
12/01/2023	1700/1200	**		US	USDA GrainStock - NASS
12/01/2023	1700/1200	***		US	USDA Winter Wheat
12/01/2023	1700/1700			UK	BOE Mann Lecture at University of Manchester
12/01/2023	1800/1300	***		US	US Treasury Auction Result for 30 Year Bond
12/01/2023	1900/1400	**		US	Treasury Budget
13/01/2023	0700/0700	**		UK	UK Monthly GDP
13/01/2023	0700/0700	**		UK	Index of Services
13/01/2023	0700/0700	***		UK	Index of Production
13/01/2023	0700/0700	**		UK	Output in the Construction Industry
13/01/2023	0700/0700	**		UK	Trade Balance
13/01/2023	0700/0800	***		SE	Inflation report
13/01/2023	0745/0845	***		FR	HICP (f)
13/01/2023	0800/0900	***		ES	HICP (f)
13/01/2023	0900/1000	*		IT	Industrial Production
13/01/2023	0900/1000			DE	GDP 2022
13/01/2023	1000/1100	**		EU	Industrial Production
13/01/2023	1000/1100	*		EU	Trade Balance
13/01/2023	-	***		CN	Trade
13/01/2023	1330/0830	**		US	Import/Export Price Index
13/01/2023	1500/1000	***		US	University of Michigan Sentiment Index (p)
13/01/2023	1520/1020			US	Philadelphia Fed's Patrick Harker