Written Commentary
- US Retail Sales and PPI in focus, as UK RICS House Prices, Swedish CPI and Indian WPI digested; Brazil Retail Sales and Canada Manufacturing Sales also on tap; busy run of ECB speakers, IEA Oil Market Report and IGC monthly Grains report
- US Retail Sales; rebound in auto sales, higher gasoline prices seen pacing rebound, core sales recovery expected to be modest, watch revisions
- US PPI: gas prices and household energy expected to pace headline rise, but focus on extent of core pressures; y/y rates to remain subdued
EVENTS PREVIEW
US data (Retail Sales, PPI, Weekly Jobless Claims) dominates an otherwise quite modest events calendar, with a further uptick in the UK RICS House Price survey, weaker than expected Swedish CPI and as expected Indian WPI to digest, while Brazilian Retail Sales and Canadian Manufacturing Sales are also ahead. There are a number of ECB speakers, though many, not all are again addressing macroprudential topics, while commodity markets will look to the IEA’s monthly Oil Market Report, with the focus on the likely large divergence to OPEC estimates, and the IGC monthly grains report. Markets would appear to be both increasingly cautious about equity and credit valuations, and to a certain extent paralysed by next week’s likely very divergent messages at the Fed and BoJ policy meetings, the balance sheet measures may prove to be of more significance than the messages on rates.
** U.S.A. – February Retail Sales, PPI **
Retail Sales are projected to fully reverse January’s drop with a rise 0.8% m/m, paced by the rebound in auto sales and higher gasoline prices, while the ex-Autos & Gasoline measure is expected to rise by just 0.3% m/m, per se only recovering some of January’s -0.5% m/m, obviously subject to revisions. This would fit with anecdotal evidence from the latest Beige Book, and indeed credit card spending data.
PPI is seen up 0.3% m/m, paced by household energy and gasoline prices, but the focus will likely be on core measures, both due to the overshoot on core CPI, and to see if the portfolio management and related fees that made a key contribution to the January jump was a one-off or a more persistent pressure. Should PPI echo CPI with an overshoot relative to forecasts, it will also be interesting to see if the divergence in bond and equity market reaction to the CPI data persists. Weekly Jobless Claims are seen little changed at a very low 218K, underlining that even though labour demand is easing, the rise in Unemployment is at most modest.
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