Weekly Analysis (13-16 Feb)

The coming week in the United States is set to feature key economic updates, including the highly anticipated January Consumer Price Index (CPI) report, retail trade figures, industrial production data, and the initial February reading of the Michigan consumer sentiment. Headline inflation is expected to ease to 3% for January, marking the lowest level since last June, with the core inflation rate forecasted to reduce to 3.8%, a low not seen in over two years. Monthly increases for both headline and core inflation are predicted to remain at 0.2% and 0.3%, respectively. Retail trade growth is estimated to slow to 0.1% in January from a 0.6% increase in December, while industrial production is projected to rise by 0.3%. Consumer confidence in February is forecasted to reach its highest level since July 2021.
Speeches by various Federal Reserve officials will also draw attention, along with data on housing starts, building permits, producer and foreign trade prices, business inventories, homebuilder sentiment, capital flows, the government's monthly budget, and regional manufacturing indices from New York and Philadelphia.
In the UK, forthcoming data releases will cover GDP growth, employment figures, inflation rates, and retail sales, with predictions indicating a slight economic contraction in Q4, the potential for increased annual inflation to 4.2%, a rise in the unemployment rate to 4%, and a recovery in retail sales. The Eurozone is expected to confirm avoidance of a recession at 2023's end, with Germany's economic sentiment potentially reaching a 12-month high and Switzerland's inflation rate anticipated to ease to 1.6%. Key Eurozone data will include industrial production and trade balance figures, alongside Germany's wholesale prices.
While financial markets in China will close for Lunar New Year celebrations, speculation will continue on the effectiveness of Beijing's support measures to stabilize the equity market and the broader economy. Japan's preliminary GDP data is likely to show a rebound in Q4 2023. Australia will focus on February's consumer confidence, January's business confidence, and the year's first labor market data.