On Monday 5th: The Australian and German Trade Balances are due to be released, along with a range of Services PMIs from China, Spain, Italy, France, Germany, the EU, the UK and the US among others.
On Tuesday 6th: The Reserve Bank of Australia meets on Monetary Policy, and the Ivey Purchasing Managers Index is due from Canada.
On Wednesday 7th: The Canadian and US are due to publish their Trade Balances.
On Thursday 8th: China will release its latest Inflation data and Producer Prices.
On Friday 9th: German Inflation figures are due, along with Canadian Employment data.
Weekly outlook
After a full-on list of economic data for investors to follow last week, the second week of February is a little more on the quiet side.
Australia will again be bracing themselves for their first Monetary Policy Meeting of the year finishing Tuesday. Many will be hoping that the previous ‘wait and see’ approach of Michelle Bullock and her Committee has resulted in a slowing of prices and the overall economy in line with the expectations of the central bank in order to enable rate cuts in the near future. Following last week’s release of softer than expected quarterly inflation data, where the annualized rate fell to 4.1%, bond traders have increased their bets on an early interest rate reduction. Some predictions put the first cut as early as May this year. Time will tell!
Also on the radar, there are some big name companies releasing their earnings this week, one of which is PepsiCo. As demand has remained strong lately despite numerous price rises, the food and drinks giant suggested last quarter that it will implement price rises again in 2024. This comes after the company raised its profit prediction for 2023 for the third consecutive quarter. If consumers have shifted their buying habits elsewhere since then as a result, it will be interesting to see how the company performs this week. Zacks Investment Research predicts the food and beverage firm will announce quarterly profits of $2.17 per share, indicating a +10.2% change from the previous year, and expected revenues are $23.42 billion, 6.6% more than the same period last year.
Monday 5th of February
In November 2023, Australia's trade surplus on goods rose to AUD 11.44 billion, above market expectations of AUD 7.5 billion. This was an increase from the revised AUD 7.66 billion surplus recorded in the previous month. When the new data for December is released at 12:30 AM GMT today, expectations are for a dip back to a surplus of around 7.9 billion.
Germany’s Trade Balance for December 2023 is also due this morning at 7:00 AM GMT. In November 2023, Germany's surplus increased to EUR 20.4 billion, the highest level since January 2021 and up from a marginally revised EUR 17.7 billion the month before. Expectations are for a drop to around EUR 17 billion.
A number of services PMIs are due to be released across the day today from countries such as China, Spain, Italy, France, Germany, the EU, the UK and the US. Broadly speaking, the service sector has seen some improvement in recent months, and forecasts suggest that many of the major economies will remain in or move to positive growth with 50 or above on the index.
Major Earnings Releases:
● McDonald’s
● Vodafone
Tuesday 6th of February
The Reserve Bank of Australia is due to meet on Monetary Policy today, with the Decision Statement due to be released at 3:30 AM GMT and a Press Conference to be held an hour following. The RBA kept the official cash rate at 4.35% during its last meeting of the year, enabling the central bank to continue to examine the effect of past rate rises. Last month, Governor Bullock warned that inflation was increasingly being driven by excessive domestic demand rather than supply shocks from outside. The board acknowledged that progress towards reducing inflation back to the target range of 2 to 3% had been slower than anticipated, with underlying inflation higher than projected due to increased service costs. A further hold on rates is forecast this week.
The Ivey Purchasing Managers Index in Canada increased to 56.3 in December 2023, up from 54.7 in November and beyond market expectations of 54.2. The most recent figure showed a fifth straight month of improvement in Canadian economic activity, the largest since last April. When the latest figures are released at 3:00 PM GMT, expectations are for a decline to around 55.8.
Major Earnings Releases:
● Toyota Motor
● BP
● UBS Group
● Spotify Tech
Wednesday 7th of February
The latest Canadian Trade Balance is due at 1:30 PM GMT today. In November 2023, Canada posted a surplus of CAD 1.6 billion, a significant decrease from the previous month's surplus of CAD 3.2 billion and below market estimates of CAD 2 billion. The smaller surplus was due to a 1.9% rise in imports to CAD 64.2 billion. Expectations are for an increase to around CAD 1.8 for the most recent data from December.
The US will also publish their Trade Balance today. The US deficit dropped to -$63.2 billion in November 2023, down from -$64.5 billion in October and below predictions of a -$65 billion imbalance. A decrease in the deficit is expected for December to be around -$62.4 billion when the new data is published at 1:30 PM GMT.
Major Earnings Releases:
● Walt Disney
● TotalEnergies SE
● PayPal
● Amundi
● Coty Inc
● Deutsche Boerse
Thursday 8th of February
China's consumer prices declined 0.3% year over year in December 2023, marking the third consecutive month of declines and the longest sequence since October 2009. The figures were less than market projections of a 0.4% dip, but reducing from the worst drop in three years of 0.5% in November. The latest Inflation figures and Producer Prices will be released today from 1:30 PM GMT.
Major Earnings Releases:
● L'Oréal
● AstraZeneca
● Siemens
● Philip Morris
● Unilever
● Vinci
● Kering
● Crédit Agricole
● Publicis Groupe
● Société Générale
● Unibail-Rodamco
● Ubisoft
Friday 9th of February
According to earlier estimates that will potentially be confirmed today at 7:00 AM GMT, German consumer price inflation fell to 2.9% year on year in January 2024, down from 3.7% the previous month and below the market expectation of 3.0%. It will be the lowest rate since June 2021, led by a slowing of goods inflation.
A range of Canadian Employment data is due today from 1:30 PM GMT. In December 2023, Canada's unemployment rate remained at 5.8%, which was slightly lower than the 5.9% predicted and unchanged from the 22-month high set the previous month. Following a 24.9K increase in November and falling short of predictions of 13.5K growth, employment in Canada nudged up by 0.1K in December 2023. Expectations are for the Unemployment Rate to climb to around 6% for January and around 5K less employed positions are predicted to be recorded for the same period.
Major Earnings Releases:
● PepsiCo
● Hermès
● SAAB
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