Weekly Analysis (11 - 15 March)

The upcoming week in the US is highlighted by the long awaited February Consumer Price Index (CPI) report, along with updates on retail sales, industrial production, and the preliminary Michigan consumer sentiment for March. Inflation is expected to stay stable at 3.1% in February, with the core rate predicted to drop to 3.7%, marking its lowest since April 2021. Month-over-month, both headline and core inflation rates are projected to increase by 0.4% and 0.3%, respectively. Retail sales are forecasted to grow by 0.5%, partly offsetting a 0.8% decrease in January. Industrial production is anticipated to remain steady after a slight decline of 0.1%. Additionally, the Michigan consumer sentiment index for March is expected to stay at 76.9, consistent with February's figure and slightly below the two-and-a-half-year high of 79 in January. Other notable US data releases include producer and foreign trade prices, business inventories, the monthly government budget statement, and the New York Empire State Manufacturing Index.
In the United Kingdom, the focus will be on the monthly GDP figures, industrial production, trade balance, and employment data. The UK economy is forecasted to show signs of recovery in January, despite a pause in industrial and manufacturing growth after two consecutive months of expansion. The unemployment rate is expected to remain at 3.8% for the three months to January, the lowest in a year, with average weekly earnings, including bonuses, predicted to slightly decline to 5.7%, the lowest since July 2022. Additionally, final inflation data for Germany, France, and Italy are due, with industrial activity in the Euro Area likely to decrease after two months of growth. Other significant releases include Germany's wholesale prices and Italy's retail sales and foreign trade statistics.
In China, attention turns to the People's Bank of China's announcement on the one-year medium-term lending facility rate, amidst growing expectations of a potential rate cut. The Lunar New Year holidays are anticipated to have slowed loan growth from January's record highs. The house price index will also be closely watched. In Japan, revised Q4 GDP estimates are expected to show a 0.3% growth, revising the initial 0.1% contraction, driven by stronger corporate investment. The focus will also be on machine tool orders and the Producer Price Index (PPI). Lastly, the NAB business confidence index in Australia will offer insights into business sentiment in the country.