Draghi testimony tops busy roster of central bank speakers, with modest
schedule of data looking to UK Finance Mortgage Approvals and US
New Home Sales
- Week Ahead: Powell testimony in focus as month end looms; US PCE
deflators, revised Q4 GDP, Eurozone CPI, end of month run of activity
data in Japan, Australia CapEx and Canada Q4 GDP feature statistically
- Politics dominates at end of week, busy run of earnings in Europe/UK
and Eurozone tops govt bond auction schedule
..........................................................................
********************
** EVENTS PREVIEW **
********************
The week gets off to a relatively subdued start with another gaggle of central bank speakers and the German CDU convention, which will vote on approving the new cabinet and the grand coalition, topping the agenda, with the only items of note statistically being the overnight China Property Prices and Singapore Industrial Production ahead of UK Finance Mortgage Approvals and US New New Home Sales. Following on from a thoughtful speech from Coeure on the balance between between the outstanding stock and flow of QE, Draghi testifies to the European parliament, though if previous testimony is a guide, then he is unlikely to stray from the current script on the policy outlook, which emphasizes that the council will debate a potential change in language on the policy outlook at its March meeting, and may signal the timeline for the end of QE, with much being contingent on the new staff forecasts.
For the week ahead, Powell's two days of testimony on the economy and monetary policy will be the focal point, though he will probably try and emphasize that the current trajectory for policy (both rates and Fed Balance sheet reduction) is appropriate. Statistically, the US PCE deflators (with core seen unchanged in y/y terms at 1.5%) tops the US run, which also sees Consumer Confidence, the first revision to Q4 GDP, and the usual end of month run of surveys and Construction Spending, though due to February being a short month, the Payrolls data will be published next week. A fairly busy week for the Eurozone has provisional CPI readings for Germany, Spain, France, Italy and Eurozone, along with the Manufacturing PMIs that feature around the world. Industrial Production, Retail Sales and Unemployment will be the key items for Japan, while Australia looks to Q4 CapEx, Canada has Q4 and December GDP, and China has the official NBS PMIs.
Central bank speakers are fairly plentiful throughout the week, though obviously very much subordinated in market reaction terms to Powell and indeed monnth end considerations. In the interest space, the March/June futures rollover takes place in the US and UK.
Politics will as ever cast a long shadow, with the focus mostly on the end of the week events, which will see UK PM May outline the (supposedly definitive) 'Road to Brexit', along with Sunday's first round of voting in the Italian General Election, as well as the result of the German SPD membership vote on the Grand Coalition agreement.
Government bond supply is fairly plentiful in the Eurozone, with auctions in Italy, Germany, France and Sapins, while the UK re-opens its currrent 5-yr benchmark Gilt.
The week's corporate earnings schedule is above all busy in Europe and the UK, and features: BASF, Fresenius SE, GKN, Standard Chartered, Ahold Delhaize, Bayer, Carrefour, Repsol, Anheuser-Busch InBev, Areva, Capita, Peugeot, Suez, WPP and LSE. The US looks to Tenet Healthcare, Frontier Comms, Salesforce, TJX, Valeant, VMware, Foot Locker and JC Penney, while the rest of the Americas has Bank of Nova Scotia, Vale, Ambev, Toronto-Dominion Bank and LafargeHolcim.
from Marc Ostwald