ECB meeting clearly will overshadow data releases this week

March 7, 2016

United States:ВВ This week’s economic calendar is as thin as it could be with only 8 releases and none of the crucial. February trade price data (Friday) headlines the slate that includes the Fed’s LMCI and consumer credit reports (today) and January wholesale trade (Wednesday), along with weekly jobless claims, the Treasury budget, and Q4 QSS (Quarterly Services Survey) figures (Thursday). Import prices are forecast dropping 0.9% on the month, with export prices off 0.5% as weakness in energy prices remains a major drag. Wholesale sales are seen falling 0.8%, with inventories dipping 0.2%. These data will help fine tune GDP forecasts. After last week’s data we’re seeing a 1.5% growth pace for Q1, from an upwardly revised 1.1% in Q4 (was 1.0%). Note that the Atlanta Fed’s GDPNow estimate was revised up to 2.2% after jobs and trade data, from 1.9% previously.

Canada:ВВ It will be a very busy week of data and events, with the focus on the Bank of Canada’s rate announcement (Wednesday). We expect no change to the current 1.00% rate setting, with Poloz maintaining the cautiously constructive outlook for domestic and global growth. The slate of economic data due this week should support the Bank of Canada’s outlook. Employment (Friday) is the data highlight of the week, with jobs expected to rise 10.0k in February after the 5.7k drop in January. The unemployment rate is seen steady at 7.2%. Housing starts (Tuesday) are projected to improve to a 175.0k unit clip in February from the 165.9k unit pace in January. Building permits (Tuesday) are expected to rise 3.0% m/m in January after the 11.3% surge in December. While capacity utilization (Thursday) is expected to fall to 81.7% in Q4 from 82.0% in Q3, with the report consistent with an economy that has ample spare capacity. The new home price index (Thursday) is anticipated to rise 0.1% m/m in January after th e 0.1% gain in December. Net worth for Q4 (Friday) will feature another rise in the ratio of net worth to disposable income. Governor Poloz provides introductory remarks (Thursday) at the Canadian Institute for Advanced Research in Ottawa.

Europe:ВВ The ECB meeting clearly will overshadow data releases this week, which include German orders and production numbers for January. German factory orders came in better than expected earlier at -0.1% against expectations of -0.5%. The previous month was also revised up to -0.2% form -0.7%. Industrial production (Tuesday) meanwhile, is expected to pick up 0.6% m/m (median same), after the -1.2% m/m contraction in the previous month, which was also impacted by the mild weather at the end of last year, which cut back energy production. French industrial production (Thursday) should show a similar pattern. The final reading of Eurozone Q4 GDP (Tuesday) is expected to be confirm growth rates of 0.3% q/q and 1.5% y/y, but is too backward looking to change the outlook. The same holds for final February inflation readings from Germany, France and Spain, which are not expected to show major revisions. The calendar also has German trade data, as well as a German bond auction. Events include a Eurogroup meeting, which will be watched for comments on the progress on the Greek bailout review. There also is a one day summit on the EU refugee crisis. We don’t expect major progress, but rather the discussions will once again show the growing rift between countries on the issue.

United Kingdom:ВВ The Brexit debate will remain the central theme, with the pound sensitive to any signs that the “Outers” are making a serious challenge to the status quo of the “Inners.” So far this hasn’t been the case. The latest FT poll tracker has 46% favouring to remain in the EU, 41% wanting to leave, and 13% still undecided. Big misses in UK PMI numbers for February last week highlighted flagging growth momentum, though sterling markets have discounted a bearish narrative that has seen BoE tightening expectations being pushed out to 2017. The calendar this week brings the BRC retail sales report for February (Tuesday), industrial production for January (Wednesday) and January trade numbers (Friday). We don’t anticipate these to be market movers. December. The trade figures should see a deficit of GBP 10.2 bln in January. BoE Governor Carney is also due to testify before Parliament (Tuesday).

China:ВВ There is a lot of data from China this week. The February trade report (Tuesday) should show a narrowing in the surplus to $53.0 bln from $63.3 bln in January. February foreign direct investment (Tuesday) is seen sliding further to -3.3% y/y from -3.2% in January. February CPI (Thursday) is forecast accelerating to a 2.0% y/y pace from 1.8%, while PPI likely edged up to -5.0% y/y from -5.3%. February loan data is also due Thursday. January industrial production will be released on Saturday, and is likely to come in up 5.5% y/y from the 6.13% pace in January.

Japan:ВВ ВВ BoJ Governor Kuroda will be speaking at a Yomiuri Shimbun event ahead of next week’s (March 14, 15 policy meeting). Q4 GDP (Tuesday) is expected to be revised down to -1.5% from the preliminary -1.4%, while the January current account surplus (Tuesday) is seen narrowing to JPY 900 bln from 960.75 bln previously. February consumer confidence (Tuesday) is forecast to have dipped to 42.3 from 42.5. February bank loans and first 20-day February trade data are also due Tuesday. February PPI (Thursday) is expected to improved slightly to -2.4% y/y from -3.1% in January.

Australia:ВВ calendar is sparse this week after last week’s data barrage and the RBA meeting. The feature economic release is January housing finance (Wednesday), expected to fall 1.0% m/m following the 2.6% gain in December. ANZ job ads (today) disappointed. The actual number -1.2% was lower than anticipated after the 1.0% gain in January. RBA Deputy Governor Philip Lowe speaks (Tuesday) at the Urban Development Institute of Australia’s (UDIA) National Industry Congress in Adelaide.

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