Economic week ahead: Party hearty

Here is your guide to the major economic events – and huge parties – likely to move markets and make headlines over the coming days.

North America
President Barack Obama will deliver his annual State of the Union message to a joint session of Congress on Tuesday. With America’s unemployment rate currently at 7.9%, Obama has said he will focus the bulk of his remarks on the economy and job creation.

Multiple media, citing a variety of White House sources, are also reporting that President Obama will use the speech to press for a debt reduction agreement that includes a mix of targeted budget cuts and new tax revenues. If Democrats and Republicans are unable to reach a budget agreement by March 1, $85-billion in automatic spending cuts will take effect, creating further drag on America’s struggling economy.

Beyond President Obama’s speech, last month’s retail sales figures, weekly jobless claims numbers and January’s industrial production data are the highlights on this week’s data calendar.

Economists surveyed by Dow Jones expect retail sales figures – scheduled for release on Wednesday – to show that sales rose 0.1%, month on month, in January, down from 0.5% growth in December. Analysts surveyed by Bloomberg expect weekly jobless benefit claims to have fallen to 360 000 in the week ended February 9 from 366 000 in the previous week. Markets expect industrial production figures to show that output rose 0.3% on a monthly basis in January, the same rate of growth recorded in December.

To America’s north, Canada will release December’s manufacturing sales figures on Friday. Consensus is for a 0.5% monthly decline following November’s surprisingly robust 1.7% surge.

France – Europe’s number two economy – will release industrial production figures on Monday. Consensus is that, on a monthly basis, production declined 0.3% in December following a 0.5% uptick in November. On an annual basis, however, output is thought to have declined 2.1%, an improvement over November’s 3.6% decline.

The United Kingdom will release January’s consumer price index (CPI) readings on Tuesday. Markets expect the index to have risen 2.7% in January, the same rate observed in December. A day later, the Bank of England will release its inflation report, the bank’s quarterly update on the country’s economic outlook. Markets expect the report to show that policymakers have downgraded their outlook for Europe’s third largest economy.

On Thursday, flash estimates of fourth quarter gross domestic product (GDP) for the eurozone as a whole as well as Germany, France and Italy individually will dominate. The troubled eurozone likely contracted 0.4%, quarter on quarter, in the October to December period following a 0.1% contraction in the third quarter of 2012.

On a seasonally adjusted basis, Germany – the continent’s largest economy – likely contracted 0.5%, quarter on quarter, during the last three months of 2012 after eking out 0.2% growth in the previous three months. Markets suspect that France’s economy shrank by 0.2%, quarter on quarter, following 0.1% growth in the third quarter. The pace of contraction in Italy – Europe’s fourth biggest economy – is expected to have accelerated to 0.5%, quarter on quarter, in the fourth quarter from 0.2% in the third.

Chinese markets will be closed this week as the country celebrates its week-long Spring Festival, the most significant holiday of the year. In the absence of data from Asia’s largest economy, economists and investors are likely to take their cues from the region’s other heavyweight economies over the coming days.

Japan – the region’s second largest economy – will release January’s corporate goods price index on Wednesday and fourth quarter growth figures on Thursday. Economists surveyed by Market News International expect January’s CGPI to fall 0.3%, year on year, its tenth consecutive drop. GDP is expected to have risen 0.2%, quarter on quarter, following a 0.9% drop in the third quarter.

Also on Thursday, the Bank of Japan will announce its latest monetary policy decisions. Economists expect officials to leave interest rates and the size of the bank’s asset purchase programme unchanged.

India – the region’s third largest economy – will release last month’s trade figures on Monday, industrial production numbers on Tuesday and wholesale price index readings on Thursday.

India’s trade deficit narrowed to $17.7-billion in December from $19.3-billion in November, but may have widened again last month. Analysts at 4CAST expect that the country’s trade gap swelled to $19.6-billion. Markets expect that output at factories, mines and utilities likely rose 1.1%, year on year, in December after shrinking 0.1% in November. India’s annual inflation rate eased to a three-year low of 7.18% in December and is expected to have slowed further to 6.98% last month.

Latin America
Brazil’s annual carnival celebrations began on Friday. With the region’s largest economy in partying through Wednesday, Mexico – Latin America’s number two economy – will dominate the week ahead. The country will release December’s industrial production statistics on Monday.

Mexico’s industrial output rebounded to a five-month high of 0.9% month-on-month growth in November following October’s 0.9% contraction. On an annual basis, production registered 2.8% growth. Economists expect that December’s expansion was more subdued. Analysts surveyed by Dow Jones anticipate monthly growth of 0.2%, translating into year on year growth of 2.5%.

Elsewhere in the region on Monday, Argentina will report budget balance figures, Colombia will release consumer confidence and vehicle sales figures and Peru will issue trade statistics. No major releases are scheduled in the region on Tuesday, but Wednesday will bring Mexico’s fourth quarter inflation report and same store sales figures from the country’s retail trade group.

On Thursday, Chile’s central bank will announce its latest monetary policy decision. Economists widely expect policymakers to leave the bank’s 5% nominal overnight rate target unchanged. On the data front, Brazil will release formal job creation numbers and Colombia will report outstanding loan figures.

Finally, on Friday, Venezuela will report lending figures. Peru will release its monthly GDP and unemployment data. And Argentina will issue consumer and wholesale inflation figures, both of which, according to the International Monetary Fund (IMF) and almost all economists not employed by Argentina’s government, are fake.

Middle East and Africa
Africa’s data week began on Sunday with Egypt’s release of last month’s CPI data. Figures released by Egypt’s Central Agency for Public Mobilisation and Statistics showed that consumer prices rose 1.7% last month, their biggest monthly rise in more than two years. The country’s annual inflation rate climbed to 6.3% from 4.7%.

Egypt’s currency – the pound – has weakened nearly 8% against the dollar since the end of 2012 and is expected to continue its slide. Because Egypt imports a large share of consumer goods, the currency’s devaluation could push inflation into double-digit territory over the coming months.

Midweek, attention will shift to South Africa, the continent’s largest economy. Statistics South Africa will release December’s retail sales figures on Wednesday. Sales quickened to 3.4% year-on-year growth in November, but are widely expected to have decelerated in December. Consensus is for lacklustre growth of 1.2%, year on year.

Following Wednesday’s retail figures, markets will turn their attention to the country’s wholesale trade, motor trade and mining output figures for December on Thursday. The mining numbers will be the most scrutinised of the three releases.

Elsewhere on the continent this week, Ghana is expected to release December’s gross reserves figures and January’s CPI data. The country’s central bank will announce its latest interest rates decision this week or next. Tanzania and Namibia will release last month’s CPI data. And Angola’s parliament will hold its final vote on the country’s 2013 budget on Thursday.

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.


‘Tenderpreneurs’ block the delivery of protective equipment to schools

Protests by local suppliers have delayed PPE delivery, which according to the DBE, is one of the reasons the reopening of schools has been pushed back until June 8

‘Soon he’ll be seen as threatening, not cute’: What it’s...

There is no separating George Floyd’s killing from the struggles black people have faced ever since the first slave ships landed on these shores

How schools could work during Covid

Ahead of their opening, the basic education department has given schools three models to consider to ensure physical distancing

Press Releases

Mining company uses rich seam of technology to gear up for Covid-19

Itec Direct technology provides instant temperature screening of staff returniing to the workplace with no human contact

Covid-19 and Back to School Webinar

If our educators can take care of themselves, they can take care of the children they teach

5G technology is the future

Besides a healthcare problem Covid-19 is also a data issue and 5G technology, with its lightning speed, can help to curb its spread

JTI off to court for tobacco ban: Government not listening to industry or consumers

The tobacco ban places 109 000 jobs and 179 000 wholesalers and retailers at risk — including the livelihood of emerging farmers

Holistic Financial Planning for Professionals Webinar

Our lives are constantly in flux, so it makes sense that your financial planning must be reviewed frequently — preferably on an annual basis

Undeterred by Covid-19 pandemic, China and Africa hold hands, building a community of a shared future for mankind

It is clear that building a community with a shared future for all mankind has become a more pressing task than ever before

Wills, Estate Administration and Succession Planning Webinar

Capital Legacy has had no slowdown in lockdown regarding turnaround with clients, in storing or retrieving wills and in answering their questions

Call for Expression of Interest: Training supply and needs assessment to support the energy transition in South Africa

GIZ invites eligible and professional companies with local presence in South Africa to participate in this tender to support the energy transition

The best local and international journalism

handpicked and in your inbox every weekday