Forecasting the Coming Week: US inflation figures grab all the attention

Following Monday’s Powell-driven sharp rebound in the US Dollar, the risk-linked galaxy managed to regain some balance as the sessions passed by, sparking a decent recovery in the likes of the single currency and the British Pound in an environment broadly dominated by speculations surrounding the potential timing of interest rate cuts by the Federal Reserve.

On Monday, the only release in the US docket will be the January Monthly Budget Statement. Moving forward, the US Inflation Rate is due on February 13, while Retail Sales, Industrial Production, Business Inventories, the NAHB Housing Market Index and Net Long-term TIC Flows are expected on February 15. Finally, Producer Prices, Housing Starts, Building Permits, and the preliminary Michigan Consumer Sentiment all be published on February 16. The USD Index (DXY) entered a small consolidative range following Monday’s sharp rebound to fresh YTD peaks past 104.00.

In the domestic data space, the Economic Sentiment for both Germany and the euro area tracked by the ZEW institute comes on February 13. Additionally, another revision of the Q4 GDP Growth Rate along with Industrial Production readings is due on February 14. The Balance of Trade figures in the euro bloc for the month of December will close the docket on February 15. EUR/USD ended the week on a positive note, regaining some balance following Monday’s steep decline. The pair continues to target the 1.0800 hurdle in the very near term.

It will be an interesting week, data-wise, in the UK. The labour market report is due on February 13, followed by the Inflation Rate on February 14. On February 15, the GDP figures, Balance of Trade, Construction Output, and Industrial and Manufacturing Production are due, all ahead of the NIESR GDP Tracker, Finally, Retail Sales for the month of January will be released on February 16. The weekly recovery in GBP/USD appears to have stalled just ahead of the 1.2650 zone so far.

In the Japanese calendar, Producer Prices are due on February 13 ahead of Industrial Production and the flash Q4 GDP Growth Rate on February 15. Weekly Foreign Bond Investment and the Tertiary Industry Index are both due at the end of the week. USD/JPY approaches the key 150.00 barrier on the back of the intense pick-up in selling pressure around the Japanese currency.

In Australia, the Westpac Consumer Confidence Index kickstarts the week ahead of the publication of the labour market report and Consumer Inflation Expectations on February 15. It was a choppy week for AUD/USD, which extended the trade in the lower end of the range around the 0.6500 zone.

 

Anticipating Economic Perspectives: Voices on the Horizon

• RBA A. Kohler, BoE Governor A. Bailey and Minneapolis Fed N. Kashkari speak on February 12.
• FOMC Governor M. Barr speaks on February 14.
• RBNZ Governor A. Orr, ECB Board member J. Nagel are due to speak on February 15, along with BoE MPC members C. Mann and M. Greene.
• On February 16, San Francisco Fed M. Daly, Atlanta Fed R. Bostic and BoE MPC member H. Pill are also seen delivering speeches.