Economic week ahead: Packed
With more than 250 noteworthy economic releases scheduled across the globe this week, the markets will have plenty of data to keep themselves busy.
US growth figures and manufacturing snapshots are from China to South Africa, enough to keep investors' hands full this week. Here are the highlights.
America's data week will begin with the release of December's durable goods orders and pending home sales data on Monday. Analysts surveyed by Dow Jones expect durable goods orders to have posted a 2% monthly gain in December, up from 0.8% growth in November. Pending homes sales data are forecast to show a 1% monthly rise, down from 1.7% in November.
On Tuesday, analysts surveyed by Bloomberg will expect November's S&P/Case-Shiller home prices index to record a 5.8% year on year rise – an improvement on October's 4.3% gain – and the Conference Board's consumer confidence index to hold steady at 65.1 in January.
On Wednesday, gross domestic product (GDP) figures will take centre stage. Consensus is that the world's largest economy slowed to 1% quarter on quarter growth in the fourth quarter from 3.1% growth in the third. In the GDP data's shadow, ADP will release the results of its January jobs survey. Analysts expect the results to show that private sector employers added 165 000 positions this month, down from 215 000 in November.
On Thursday, this month's personal income and outlays (spending) report is expected to show that, on a monthly basis, personal incomes rose 0.8% in December, and consumer spending likely rose 0.3%.
Finally, on Friday, January's nonfarm payrolls report is forecast to show a gain of 168 000 positions, an improvement on December's 155 000. The country's unemployment rate is expected to hold steady at 7.8% and average hourly wages are expected to post a 0.2% rise.
A series of purchasing managers' index (PMI) releases from across the continent will dominate Europe's economic calendar this week. Manufacturing PMI numbers for Ireland, Russia, Sweden, Hungary, Norway, Poland, Turkey, Spain, the Czech Republic, Switzerland, Italy, France, Germany, Greece and the United Kingdom along with readings for the eurozone as a whole are scheduled for release on Friday.
With the exception of five countries – Ireland, Norway, Turkey, Switzerland and the UK – economists expect these forward looking gauges of economic activity to remain below the 50.0 mark separating expansion from contraction. Germany and France – the continent's two largest economies – are expected to remain stuck at 48.8 and 42.9, respectively. The 17-member eurozone as a whole is also expected to remain mired in contraction territory for the 18th straight month at a reading of 47.5.
In the run-up to Friday's data deluge, investors are likely to focus on a series of consumer sentiment measures in some of the continent's largest economies. On Monday, Italy's ISAE consumer confidence index is forecast to rise from 85.7 to 86.1 and, on Tuesday, Germany's GfK consumer sentiment index is expected to post a slight gain, from 5.6 to 5.7. Analysts at 4CAST expect France's INSEE consumer confidence index, also scheduled for Tuesday, to fall from 86.0 to 84.0. On Wednesday, the eurozone's consumer sentiment index is expected to hold steady at an abysmal negative 23.9, but the UK's GfK consumer sentiment index may improve by one index point to negative 28.0.
Key data releases in China and Japan and a rates decision in India are the big items on this week's Asian economic calendar.
The Reserve Bank of India (RBI) will conclude its monetary policy review on Tuesday. With inflation pressures easing, markets expect policymakers to lower rates in a bid to bolster growth. According to a Reuters' survey, economists widely anticipate a 25 basis point cut to the country's 8.0% repo rate, a quarter point cut to the bank's 7.0% reverse repo rates, and no change to the 4.45% cash reverse ratio.
On Wednesday, Japan will release December's retail sales figures. Analysts surveyed by Market News International (MNI) expect to see a 0.3% year on year rise.
On Thursday, officials will release December's industrial output and housing starts data. Unemployment and household spending data will follow on Friday. Industrial output is forecast to show a 4.1% monthly gain. Housing starts are likely to have shown their fourth straight monthly rise and unemployment is expected to have held steady at 4.1% last month.
Closing out the week, purchasing managers' index readings for China and India are scheduled for release on Friday. Official PMI readings from the China Federation of Logistics and Purchasing (CFLP), which held steady at a seven-month high of 50.6 in December, are forecast to climb to 51.0 in January. India's index rose from 53.7 in November to 54.7 in December – the biggest monthly gain since January 2012 – and is expected to have risen further in January.
Brazil's central bank will release its weekly market expectations survey and Colombia's central bank will announce its latest rates decision on Monday. Markets expect a third straight reduction to Colombia's benchmark rate following quarter point cuts in November and December. Analysts responding to a Reuters' survey last week were nearly unanimous in their forecast for a 25-basis point cut to the bank's 4.25% overnight lending rate as officials battle a slowdown in the country's economy.
On Tuesday, Brazil will release budget numbers. Mexico will report weekly international reserves figures and Argentina will release supermarket sales data.
Retail sales figures from Chile will follow on Wednesday. Chile's retail sales figures showed greater than expected growth of 10.7%, year on year, in November. Analysts at 4CAST are expecting more modest growth of 8.8% in December.
On Thursday, Mexico will report outstanding loans data, Argentina will release a construction activity update and Brazil and Chile will release labour market data. Markets expect Brazil's unemployment rate to fall from 4.9% to 4.6% – a record low – and for Chile's jobless rate to decline from 6.2% to 6.0%.
On Friday, Peru's January consumer price index (CPI) is expected to show an uptick in inflation to 3.0% annual growth from 2.65% growth in December. Brazil's purchasing managers' index (PMI) is likely to hold steady at around 51.0 and the country's latest industrial production statistics are likely to show a 0.3% month on month decline for December, better than the 0.6% decline observed in November.
Middle East and Africa
Israel's central bank is expected to leave interest rates on hold on Monday after cutting its key interest rate by 25-basis points to 1.75% last month. Decisions from Angola, Ghana and Zambia's central banks are also expected this week.
In addition to his rates decision, Angola's National Reserve Bank (BNA) Governor Jose de Lima Massano will make a formal announcement this week about the BNA's plans to introduce a new set of Kwanza notes this year. The new bank notes are expected to include denominations ranging from one to 10 000 Kwanza. According to a report by the country's official news agency published last week, the bank will also reintroduce coins into circulation this year in denominations ranging from two to 50 Kwanza.
On the data front, Kenya, Morocco, Namibia and Nigeria will release money supply data this week and Zambia will release its latest consumer price index readings. South Africa – the continent's largest economy – will report money supply, private sector credit extension, trade balance, producer price index (PPI) and purchasing managers' index data this week.
On Wednesday, markets expect M3 money supply data to show 6.10% growth for December. Private sector credit extension likely picked up to 9.72% year on year growth last month.
On Thursday, preliminary trade numbers are expected to show a significant improvement from November's disappointingly large R7.9-billion deficit. Separately, price rises at the factory gate are expected to show 0.2% monthly growth in December, down from 0.3% growth in November.
Matt Quigley writes the weekly economic preview for the Mail & Guardian. You can follow him on Twitter at @mattquigley.