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Week Ahead – A valentine’s day treat

Started by PocketOption, Feb 15, 2023, 11:44 am

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Week Ahead - A valentine's day treat



The Valentine's Day inflation report is the main event of this week.  Disinflation trends will get tested here and we could potentially have a major turning point with Wall Street's expectations on how high the Fed will have to take interest rates. The January inflation report is expected to show headline CPI from a month ago rose 0.5%, up from the -0.1% reading in the prior month.  Inflation from a year ago is expected to improve from 6.5% to 6.2%.  The core readings on a monthly basis are expected to keep the 0.3% pace, while on an annual basis is expected to improve from 5.7% to 5.4%.  If pricing pressures come in hotter-than-expected, this could be an inflation reckoning report that might drive Fed rate hike expectations above 5.25%. 

Investors will pay close attention to Fed speak after the January inflation report. Fed's Logan, Harker, and Williams will speak shortly after the Tuesday inflation data.  On Thursday, we will hear from Mester, Bullard, and Cook.  Friday contains appearances by Barkin and Bowman. 

Earnings seasons continues with key updates from AIG, Analog Devices, Applied Materials, AutoNation, Barclays, Barrick Gold, Biogen, Coca-Cola, Deere, Devon Energy, DraftKings, Fidelity, Heineken, Hermes International, Hyatt Hotels, Kraft Heinz, Nestle, Orange, Pernod Ricard, Restaurant Brands International, Shake Shack, and Shopify


Not the most thrilling week but there is a scattering of data points, many of which the ECB won't ignore even if they aren't as impactful as the headline inflation numbers. GDP and employment on Tuesday fall into that category as we see how the bloc coped with the early winter period. That aside, central bank speak as ever remains key with President Lagarde on Wednesday the standout.


The situation in the UK is very intriguing. The economy is basically drifting at the moment, fluctuating around zero growth, unable to recoup pandemic losses, and expected to remain near the bottom of the growth table. At the same time, its inflation problem has been among the worst and even now it's only a little shy of 10% (and its peak). And yet, markets are pricing in only one more 25 basis point hike, the MPC is confident inflation will be below 4% by the end of the year and two policymakers even voted to hold at the February meeting.

GDP figures Friday confirmed the UK avoided recession by the finest of margins, a fact that could be easily revised out in the coming months. Next week we'll get retail sales, labour market, and most importantly, inflation data. Last month it fell faster than the BoE expected; could we be in for another positive surprise or will Wednesday bring us back down to earth with a bang?

No major economic events next week. Focus remains on the war in e.

South Africa

Inflation is edging ever closer to the SARB's target range of 3-6%, with CPI data next week expected to show it falling from 7.2% to 6.9%. That may allow the central bank to take its foot off the break and ease the pressure on the economy.


No major economic announcements or events next week. 


With the SNB determined to get inflation back to target below 2%, attention will be on the CPI release on Monday. Chair Jordan has been adamant that getting a grip on inflation is their absolute priority and markets are convinced, pricing in a 56% chance of 50 basis points next month, and a 44% chance of 25. 


Amid rising optimism about China’s reopening, economic momentum is growing. Strong capital inflows into China may continue, especially as the country resumes work after the Chinese New Year holiday. 

The recent strengthening of the Fed’s hawkish stance and a slight tightening of overall risk sentiment, combined with heightened US-China tensions has also led to a wave of declines in regional equities. 

Next week, there will be no critical data. Investors are awaiting the work report of Premier Li Qiang in March, among other key policy events, which may include measures to boost consumption and stimulate economic growth. The People’s Bank of China may also cut its benchmark interest rate to boost credit demand for the private sector amid the grand economic resurgence.


Inflation is within the RBI 2-6% range and yet the central bank raised rates again last week by 25 basis points to 6.5%. It's clearly concerned about the stubbornness of core inflation and fears under-tightening in the longer term over the alternative. The inflation data next week will help determine whether those are well-founded or not. Either way, further hikes look unlikely with two of the six RBI policymakers voting against the last hike.

Australia & New Zealand

Recent CPI data indicate that the RBA may have underestimated the stubbornness of Australian inflation. Policymakers may have little option but to reconsider the possibility of more significant interest rate increases.

Changes in the external environment, such as the weakening of the US dollar, the reopening of China, and improved China-Australia relations are supportive for the economies of Australia and New Zealand.

New Zealand’s inflation rate rose less than the RBNZ forecast in the fourth quarter. This has led to a slight reduction in expectations for the February meeting, although the market is still pricing in a 50 basis point hike. 

Australia's labour market figures are released on Thursday, while appearances by Philip Lowe, Governor of the RBA, will be eyed.


There is growing speculation in the market that the BoJ is about to shift its policy after widening its yield target range last December. Some market participants believe that a new BoJ leadership would be the ideal catalyst for a policy shift. The Japanese government is expected to present its nominee for the next Governor of the Bank of Japan next week, with Kazuo Ueda the reported choice.  

Japan’s preliminary fourth-quarter GDP eyed on Tuesday.


GDP data is the only notable release on Monday.

Economic Calendar

Saturday, Feb. 11

Economic Data/Events

China FDI

ECB's Visco addresses the Warwick Economics Summit in Coventry, UK

Labor protests expected in France of proposed pension reforms

Sunday, Feb. 12

Economic Data/Events

The Kansas City Chiefs and the Philadelphia Eagles play in Super Bowl LVII

Regional elections in Lombardy and Lazio, Italy

Berlin holds repeat vote for regional parliament and district councils

Monday, Feb. 13

Economic Data/Events

India CPI

New Zealand performance services index

Singapore GDP

Turkey current account

Euro-area finance ministers meet in Brussels to discuss energy markets and other topics

Fed's Bowman speaks at the American Bankers Association National Conference for Community in Orlando, Florida

ECB's Centeno speaks at a London School of Economics event on "Challenges and new approaches to European monetary policy"

The United Arab Emirates hosts the World Government Summit

Norwegian PM Gahr Store meets Lithuanian President Nausėda in Oslo

Tuesday, Feb. 14

Economic Data/Events


Eurozone GDP

Hungary GDP

Norway GDP

Japan GDP 

Australia consumer confidence

France unemployment

India wholesale prices

Japan industrial production

Mexico international reserves, inflation expectation

New Zealand food prices, house sales

UK jobless claims, unemployment

Fed's Logan takes part in a moderated discussion hosted by Texas A&M University in Prairie View, Texas

Fed's Williams gives the keynote speech at an event hosted by the New York Bankers Association

Fed's Barkin discusses inflation in an interview with Bloomberg Television

EU finance ministers meet to discuss the impact of 's war

Singapore releases 2023 budget

Wednesday, Feb. 15

Economic Data/Events

US business inventories, industrial production, retail sales, empire manufacturing

India trade

Poland CPI 


China medium-term lending

Canada housing starts, existing home sales

Eurozone industrial production

Japan tertiary index

South Africa retail sales, CPI

RBA Governor Lowe appears before the Senate Economics Legislation Committee

Thursday, Feb. 16

Economic Data/Events

US housing starts, PPI, initial jobless claims

Australia unemployment, household spending, consumer inflation expectations

China property prices, Swift global payments

Italy trade

Japan machinery orders, trade, department store sales

New Zealand net migration

Spain trade

New Zealand government releases financial statements for six months to Dec. 31

ECB's Panetta speaks at a Center for European Reform conference focused on "Monetary policy after the energy shock" in London

ECB's Nagel lectures on "Reforms for greater stability and prosperity" at the German Institute for Economic Research

ECB's Lane delivers the NIESR Dow lecture on "The Euro area hiking cycle"

Norges Bank Q1 expectations survey. Governor Wolden Bache gives annual address to the Supervisory Council of Norway's central bank

BOE chief economist Pill has a "fireside chat" on the UK economy at the Warwick Think Tank

Fed's Mester speaks at an event hosted by the Global Interdependence Center in Florida. Mester later discusses the economic outlook at a meeting of Financial Executives International of Northeast Ohio and ACG Cleveland

Fed's Bullard discusses the US economy and monetary policy at an event hosted by the Greater Jackson County Chamber in Jackson, Tennessee

Friday, Feb. 17

Economic Data/Events

France CPI

, Thailand GDP

Singapore trade

Thailand foreign reserves, forward contracts, car sales

RBA Gov Lowe appears before House Economics Committee

Fed's Barkin speaks on labor market at an event hosted by the Rosslyn Business Improvement District in Arlington, Virginia

Sovereign Rating Updates

Poland (S&P)

Switzerland (Moody's)

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