Housing reports dominate an otherwise thin week

March 21, 2016

Main Macro Events This Week

United States: Housing reports dominate an otherwise thin week. And while there are some important releases on the docket, the market impact should be minimal since the FOMC is out of the picture for now and as the data aren’t likely to change current outlooks. Trading is likely to be thinned by the approaching holiday. Existing home sales (Monday) are expected to edge up 0.5% to 5.500 mln in February (median 5.355 mln) following the 0.4% January gain to 5.470 mln. This would be a 3rd straight monthly gain as the sector continues to recover from “Know Before You Owe” distortions. There is some downside risk due to the 3 point decline in the February NAHB index. New home sales for February (Wednesday) are expected to climb 1.2% to a 500k pace (median 510k), erasing the 9.2% January drop to 494k. Durable goods orders (Thursday) are projected to decline 2.0% (median -2.4%) in February, almost halving the 4.7% January rebound, as the headline index continues its saw-toothed path. Revised Q4 GDP (Friday) should be revised a tad higher to a 1.2% growth clip (median 1.0%), from the 1.0% pace posted previously, though is down from the 2.0% Q3 rate.
Canada: Data and events slow to a trickle this week after the strong flow last week. Indeed, there are not any economic reports due — the next release is the Industrial Product Price index at the end of the month.
Europe: This week’s economic calendar holds an almost full round of confidence data, but with the ECB busy implementing the new measures, the data won’t have any immediate impact on policymakers. We are looking for a rise in the March ZEW Economic Sentiment (Tuesday) 4.5 (median 5.0) from 1.0) in February. The Ifo Business Climate (Tuesday) reading for March, meanwhile, is still expected to ease slightly to 105.6 (median 105.7) from 105.7, as future expectations remain depressed by weak orders inflow and falling exports. EMU PMI readings (Tuesday) for March, on the other hand, could well be mixed again, and we expect them to recover somewhat and rise to 51.4 (median 51.3) from 51.2, while the services reading is seen unchanged at 53.3 (median same), which should leave the composite at 53.0 (median same) also unchanged from the previous month. Finally French business confidence (Thursday) is also expected to hold steady at 103 (median same).

UK: The CBI industrial trends gets the ball rolling (Monday). We expect it to improve to -14 in the March survey (median same) from -17 previously. February inflation data (Tuesday) has us anticipating a further uptick in headline CPI to 0.4% (median same), up from 0.3% previously. This would be in line with BoE projections. February retail sales (Thursday) are expected to dip 1% m/m (median same) to take the y/y figure to +3.4% from +5.2% in the previous month. The March CBI distributive sales survey (Thursday) is expected to come in unchanged at a +10 reading in the headline realized sales figure.
China: There are no economic data releases scheduled this week.

Japan: Markets are closed today for the Vernal Equinox. Markets reopen Tuesday to the release of the March Nikkei manufacturing PMI. It’s been trending down since October, and the 2.2 point drop in February to 50.1 puts the index just barely above shrinking territory. The January “All Industry” activity index is due Tuesdaytoo. It’s seen only one positive reading over the past six months (from July). Highlighting Friday is the February national overall CPI, seen up 0.4% y/y from the prior unchanged reading, while at the core level, prices are seen unchanged y/y as they were in January. March Tokyo overall CPI is expected unchanged y/y versus -0.1% in February, while core likely fell 0.2% y/y versus the previous 0.1% outcome. February services PPI (Friday) is penciled in at 0.2% y/y, as it was in January. Revised January leading and coincident indices are also on tap. 

Australia: The thin calendar does feature two appearances from RBA officials at the ASIC Annual Forum 2016 in Sydney (Tuesday). Governor Stevens will deliver a speech and Assistant Governor (Financial System) Malcolm Edey will participate in a panel. There is little on the economic data docket this week, although the Q4 home price index (Tuesday) is scheduled for release.

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