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The most important economic events expected this week 15 to 19 Feb 2021
Coronavirus continues to weigh on major economies, with the vaccine spreading slowly. Financial markets are watching US stimulus plans make their way through Congress. Highlights of this week include the Eurozone GDP and UK inflation reports.
Inflation was a bright spot in the Eurozone, with Germany's CPI rising from 0.3% to 0.8% in January. The German Whole Price Index (WPI) jumped to 2.1%, up sharply from 0.6%.
UK GDP reports were stronger than expected. The economy expanded 1.0% in the fourth quarter, better than estimates of 0.5%. Monthly GDP increased 1.2%, beating estimates of 1.0%. However, the economy contracted by 9.9% in 2020, the largest annual contraction ever.
In the US, inflation numbers were slightly lower than expected, and the response of the US dollar was muted. The headline inflation rate decreased from 0.4% to 0.3%, while the core CPI decreased from 0.2% to 0.0%. Unemployment claims rose for the first time in four weeks, from 779,000 to 793,000. The week ended in decline, as UCS consumer confidence for the month of January decreased from 79.2 to 76.2 points. It was the lowest level since July 2020.
Eurozone GDP: Tuesday. The Covid pandemic has caused massive swings in the economy, with GDP readings of -12.1% and + 12.6% in the second and third quarters of 2021, respectively. The economy is expected to stabilize in the fourth quarter with an estimate of -0.7%.
UK Inflation Report: Wednesday. Headline inflation improved from 0.3% to 0.6% in December and another strong gain is expected in January, with 0.5% expected. Core CPI increased from 1.1% to 1.4% in December. The estimate for January stands at 1.2%.
US retail sales: Wednesday. Headline retail sales are expected to rebound after two declines. The January estimate stands at 1.1%. Likewise, core retail sales are expected to rise 0.9% after a weak reading of -1.4% previously.
Canadian Inflation Report: Wednesday. Headlines for inflation were disappointing, with a reading of -0.2% in December, missing expectations of 1.0%. The cutting CPI, which excludes the most volatile items in the core CPI, fell to 1.6%, down from 1.7%.
ADP Employment Change: Thursday. This employment index resumed its losing paths, with a drop of 28.8K in January. Will we see an improvement in February?
French Final Consumer Price Index: Friday. Inflation remains subdued in the second largest economy in the Eurozone. The index has risen 0.2% in the past two months, and the January estimate stands at 0.2%.
US Manufacturing PMI: Friday. Manufacturing PMI continues to indicate a strong expansion. The PMI rose to 59.1 in January and the next reading at 58.8
