The traditionally quiet post-payrolls weeks will see a lot of attention paid to Tuesday’s CPI print for validation – or denial – of recent inflation trends; traders will also look at Wednesday’s PPI and advanced retail sales numbers, and Friday’s building permits, housing starts, and industrial production report for indications if the recent economic stability is turning.
After Friday’s goldilocks average hourly earnings report, consensus expects a core CPI print of 0.2% mom in February, slowing after January’s impressive 0.3% increase, while headline CPI is also expected to rise 0.2% on Tuesday. The next day, core PPI is also projected to raise a trend-like 0.2% mom in February while core core (excluding trade services) PPI should also see a 0.2% gain; we also get the US advanced retail sales report that day. On Thursday, analysts are looking for initial claims to be 225k in the week ending March 10th, down modestly from the prior week’s reading of 231k. Market consensus is 0.3% mom, previous release is -0.3% mom.
In other data:
- In the Eurozone, industrial production, final print of CPI and ECB speakers in the schedule. In the UK, little of note.
- In Japan, we have PPI, core machine orders, industrial production, capacity utilization and BoJ meeting minutes.
- In Canada, we receive existing home sales and manufacturing sales.
- In China, we get retail sales, industrial production and fixed assets investment.
- In Australia, we have home loans, investment lending, business surveys and RBA speakers.
- In New Zealand, we have current account and GDP.
- In the Scandies, in Norway we have central bank rates meeting and trade balance, while for Sweden we get unemployment rate, CPI and inflation expectations.
- In Switzerland, we have SNB rates meeting and sight deposits.
Elsewhere: the Catalan parliament meets to elect a president for the region (Mon). Chancellor Philip Hammond will deliver his Spring Statement to MPs. Focus will be on the impact of Britain’s payments to Brussels post-Brexit on public finances (Tues). EU finance ministers attend Economic and Financial Affairs Council meeting on risk in the banking industry and tax-planning schemes (Tues). In New Zealand, we receive Q4 GDP on Wed. Growth appears to have strengthened in Q4, supported by household consumption and trade (Wed). We expect SNB to leaves rates unchanged (Thurs). Russian election with Vladimir Putin likely to win another term (Sun).
A summary of key global events by day courtesy of Deutsche Bank:
- Monday: As is the norm post payrolls, it’s a quiet start to the week on Monday with the only data of note being the US monthly budget statement for February. Politics should remain at the forefront, however, with Germany’s Chancellor Merkel expected to sign a coalition pact with the Social Democrats in Berlin and Italy’s Democratic Party due to hold a leaders’ meeting to replace Matteo Renzi. EU government officials will also kick off the four-day meeting to discuss the EU’s Brexit position.
- Tuesday: The big highlight on Tuesday is the February CPI report in the US, due out shortly after lunchtime. Away from that, we’ll also receive the February NFIB small business optimism reading. In Europe, the only data of note is wages data for France for Q4, while late in the evening in Japan the latest BoJ meeting minutes are due out. In the UK, Chancellor Hammond will deliver the Spring Statement at just after midday. Other potentially important events worth highlighting include European Council and European Commission statements on Brexit, and the Special Congressional election in Pennsylvania.
- Wednesday: The main focus overnight will be the latest economic activity indicators out of China for February including retail sales, industrial production and fixed asset investment. In Europe, we’ll get final revisions to February CPI in Germany along with January industrial production and Q4 employment data for the Euro area. ECB President Draghi is also scheduled to speak in the morning, followed by the ECB’s Peter Praet and then Vitor Constancio. In the US, it looks set to be another important day of data with February retail sales and PPI, followed by January business inventories. It’s worth also highlighting that the European Commission is expected to make comments on US steel and aluminium tariffs to the European Parliament.
- Thursday: With little of note in Asia the early focus for markets will be final February CPI revisions in France. Across the pond in the US, we are due to receive March empire manufacturing, February import price index, the latest weekly initial jobless claims, March Philly Fed business outlook and March NAHB housing market index data. Brexit-related headlines will likely be a focus too on Monday with EU ambassadors wrapping up their four-day meeting, which is expected to conclude with an approval of text for the EU’s future relationship with the UK.
- Friday: We end the week in Asia with January industrial production data in Japan. In Europe, the most notable release will be the final February CPI report for the Euro area while in the US, February housing starts and building permits.
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Focusing on just the US, the key economic releases are CPI, retail sales, PPI, empire manufacturing, import & export price index, building permits, housing starts, industrial production and U. of Michigan sentiment. There are no scheduled speaking engagements from Fed officials this week.
Here is Goldman’s preview with full consensus expectations:
Monday, March 12
- There are no major economic data releases scheduled.
Tuesday, March 13
- 08:30 AM CPI (mom), February (GS +0.16%, consensus +0.2%, last +0.5%); Core CPI (mom), February (GS +0.19%, consensus +0.2%, last +0.3%); CPI (yoy), February (GS +2.20%, consensus +2.2%, last +2.1%); Core CPI (yoy), February (GS +1.84%, consensus +1.8%, last +1.8%): We estimate a 0.19% increase in February core CPI (mom sa), which would leave the year-over-year rate unchanged at +1.8%. Our forecast reflects strength in shelter categories and lodging away from home but also sequential deceleration in used car prices and a pullback in the legal services subcomponent. We do not expect a reversal of January’s sharp increases in the apparel category, which we believe reflected normalization in prices following a highly promotional holiday season. Similarly, we expect medical care prices to rise further, albeit at a slower pace. We estimate a 0.16% increase in headline CPI, reflecting a decline in utility prices.
Wednesday, March 14
- 08:30 AM Retail sales, February (GS +0.4%, consensus +0.3%, last -0.3%); Retail sales ex-auto, February (GS +0.4%, consensus +0.4%, last flat); Retail sales ex-auto & gas, February (GS +0.4%, consensus +0.3%, last -0.2%); Core retail sales, February (GS +0.3%, consensus +0.4%, last flat): We estimate core retail sales (ex-autos, gasoline, and building materials) rose at a 0.3% pace in February. While retail spending growth appears due for a pickup following the January pause, the boost from tax cuts in the month will be partially offset by another year of tax refund delays. Given a modest increase in gasoline prices and the possibility of building materials strength given favorable weather, we look for a firmer 0.4% rise in both the headline and ex-auto measures.
- 08:30 AM PPI final demand, February (GS +0.1%, consensus +0.1%, last +0.4%); PPI ex-food and energy, February (GS +0.1%, consensus +0.2%, last +0.4%); PPI ex-food, energy, and trade, February (GS +0.1%, consensus +0.2%, last +0.4%): We estimate a 0.1% increase in headline PPI in February, reflecting a slight uptick in gasoline prices. We also expect 0.1% increases in the core PPI and the PPI ex-food, energy, and trade services categories. In the January report, the producer price index was firmer than expected, reflecting strength in the core measure.
Thursday, March 15
- 08:30 AM Philadelphia Fed manufacturing index, March (GS +21.0, consensus +23.0, last +25.8); We estimate the Philadelphia Fed manufacturing index moved down 4.8pt in March reflecting potential drag from the recent stock market decline and uncertainty regarding tariffs. Commentary from industrials remains encouraging, and we expect the index to remain at expansionary levels.
- 08:30 AM Empire manufacturing survey, March (consensus +15.5, last +13.1)
- 08:30 AM Initial jobless claims, week ended March 10 (GS 230k, consensus 228k, last 231k); Continuing jobless claims, week ended March 3 (last 1,870k): We estimate initial jobless claims ticked down to 230k in the week ended March 10. The trend in initial claims appears to be falling, and we look for another low reading. Continuing claims—the number of persons receiving benefits through standard programs—fell by 64k in the prior week.
Friday, March 16
- 08:30 AM Housing starts, February (GS +0.5%, consensus, -2.7%, last +9.7%): We estimate housing starts slowed to a +0.5% rate in February after a 9.7% increase in January. We expect better weather and solid increase in construction jobs growth to lead to a further increase in housing starts.
- 09:15 AM Industrial production, February (GS +0.5%, consensus +0.3%, last -0.1%); Manufacturing production, February (GS +0.5%, consensus +0.4%, last flat); Capacity utilization, February (GS 77.8%, consensus 77.7%, last 77.5%): We estimate industrial production rose +0.5% in February, as the utilities category likely rose further and manufacturing production increased, reflecting strength in auto manufacturing.
- 10:00 AM University of Michigan consumer sentiment, March preliminary (GS 97.5, consensus 99.5, last 99.7): We estimate the University of Michigan consumer sentiment index edged down 2.2pt to 97.5 in the preliminary estimate for March. We note some downside risk to our forecast from the recent stock market decline. The report’s measure of 5- to 10-year inflation expectations remained at 2.5% in February, near the middle of its 12-month range.
Source: BofA, DB, Goldman, ING
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