MORNING ROLL CALL
PMIs, the UK’s Article 50 time table, the U.S. debt ceiling, and other critical USA economic data should dominate this week’s high impact calendar events
There was quite a fuss and overall sense of panic and doom, regarding the U.S. debt ceiling a couple of years back, this followed similar, previous panics in 2011 and 2013. The USA economy and wider society, was apparently going to grind to a halt if the ceiling wasn’t raised. The ceiling was duly raised, after prompt negotiations up on Capitol Hill and the Armageddon like problem was simply kicked into the long grass.
Strangely, here we are two years later, and there isn’t any sense of panic now the debt ceiling is about to be breached again. The pervading narrative is that Congress will; meet, posture, make some noises about how terrible it is that the USA domestic debt is $20 trillion (when it was ‘only’ $10.6 trillion in 2009) and duly agree to raise it by another couple of trillion. It’s child’s play running an advanced economy with its own central bank and funds on tap; need more cash? Bring it into existence, sorted.
Monday sees the UK publish Rightmove’s latest house price inflation data; currently at 2.3% annually, a slight increase is anticipated. Bearing in mind these are asking prices, as folk buy into the supposed Spring bounce effect of the housing market, we may witness a print that beats the forecast by some distance. German producer prices are currently running at 2.4%, with a forecast rise to 3.4%. If on target this will (once again) be an indication that potential inflationary pressures are building up in Europe’s largest economy.
Two central bank big hitters hold court on Monday, the president of Germany’s Bundesbank Weidmann speaks in Germany, whilst the Fed’s Evans speaks on policy in New York.
Tuesday and the focus will be on Australia’s central bank (the RBA), as they publish their minutes approx a week after the no interest rate change policy decision. Investors and analysts will scour the notes for hawkish clues that monetary policy may be tightened in the short term.
Tuesday also sees publication of the UK’s CPI figure, currently running at 1.8%, the annual headline inflation rate is expected to breach 2% and come in at 2.1%, with the annual retail price index predicted to come in at 2.9%. With wage rises in the UK running at circa 2.3% are UK consumers and residents effectively running to stand still?
There is a raft of other UK official data published on Tuesday, notably input and output inflation, input inflation is running at an incredibly high level of 20.5%, with output prices up by 3.7%, it would appear that the post referendum rise in cheap UK exports will be a short lived phenomena.
Wednesday and the USA’s crude inventory data will be monitored carefully, OPEC’s committed cuts aren’t quite having the intended effect on the oil price, whilst the rig count and USA production is rising. The tipping point of oil production being economically viable in the USA to extract, is circa $50 a barrel, therefore when price reaches that level, the USA oil starts flowing. Existing home sales data will reveal if rising mortgage costs and stagnant wage rises are preventing sales, the forecast is for a slip of -2.3% in February.
Thursday sees the early focus on Europe with the German GfK consumer confidence survey published, together with the ECB Economic Bulletin. Year on year retail sales in the UK are forecast to have risen by 3.2%. Later on in the day the Eurozone consumer confidence index is published, expected to come in at -5.8, up from -6.2.
In the USA Janet Yellen will be holding court at a conference, weekly jobless numbers will be published, as will new home sales data – expected to slip to a 2% increase in Feb, from 3.7% previously.
Friday witnesses the publication of a raft of Markit PMI reports, starting with Japan and then mainly concentrating on European data. Traders would be advised to carefully monitor the releases for any significant deviations from the forecasts, or from the present readings.
Thereafter Canada’s yearly inflation figure is published, expected to come in at 2.1%, whilst the USA’s durable goods order print for Feb. is anticipated to reveal a fall, from 2.0% to 1.2% in the month of Feb.
Economic Calendar (all times are London GMT time).
Monday, 20 March
All day – Japan bank holiday
00:01 – UK Rightmove house price index
07:00 – German PPI inflation
12:30 – Canada wholesale sales
Tuesday, 21 March
00:30 – Reserve Bank of Australia monetary policy meeting minutes
00:30 – Australia house price index
09:30 – UK CPI inflation
12:30 – Canada core retail sales
12:30 – US current account
20:00 – Canada annual budget release
Wednesday, 22 March
04:30 – Japan all industries activity
14:00 – US existing home sales
14:30 – US crude oil inventories
Thursday, 23 March
Tentative – ECB long term financing operation
07:00 – GfK German consumer climate
09:30 – UK retail sales
12:30 – US weekly unemployment claims
14:00 – US new home sales
21:45 – New Zealand trade balance
Friday, 24 March
00:30 – Japan flash manufacturing PMI
08:00 – French flash manufacturing & services PMI
08:30 – German flash manufacturing & services PMI
09:00 – Eurozone flash manufacturing & services PMI
12:30 – Canada CPI inflation
12:30 – US core durable goods orders
13:45 – US flash manufacturing & services PMIs
