European Economics Preview: ECB, BoE Rate Decisions On Focus
Outcome of the monetary policy meetings of the Bank of England and the European Central Bank are the major events that are set to dominate the scene on Thursday.
At 1.45 am ET, Swiss consumer sentiment is due. Consumer confidence is forecast to improve to -22 in January from -24 in the prior quarter.
Statistics Netherlands is set to issue January consumer prices at 3.30 am ET. Annual inflation is expected to rise to 2.6 percent from 2.4 percent in December.
The Office for National Statistics is scheduled to issue U.K. industrial output figures at 4.30 am ET. Industrial output is expected to grow 0.2 percent month-on-month in December, following a 0.7 percent drop in November.
In the meantime, external trade figures from U.K. are due. The visible trade deficit is seen at GBP 8.6 billion in December compared to GBP 8.64 billion in November.
The BoE is widely expected to lift the size of quantitative easing by GBP 50 billion to GBP 325 billion. The interest rate is seen unchanged at a record low of 0.50 percent. The announcement is due at 7.00 am ET.
The European Central Bank is set to announce its decision at 7.45 am ET. Economists widely expect policymakers to maintain the rate at 1.00 percent. ECB President Mario Draghi is set to hold a the regular post-decision press conference at 8.30 am ET.
European Economics Preview: German Wholesale Price Data Due
Wholesale price data from Germany and producer prices from Switzerland are the reports due on Monday, headlining a light day for the European economic news. Further, the German government is set to raise EUR 4 billion from a Bubill auction.
Over the weekend, Greek lawmakers approved a highly unpopular package of austerity measures, paving the way for its international creditors to release EUR 130 billion in aid to the troubled euro member.
At 2.00 am ET, the Federal Statistical Office is scheduled to issue German wholesale price figures for January. Wholesale prices had increased 3 percent in December.
Swiss producer and import prices are due at 3.15 am ET. Producer and import prices are forecast to rise 0.2 percent month-on-month in January after rising 0.3 percent in December. On a yearly basis, it is expected to drop 2.2 percent.
At 4.00 am ET, the Czech central bank is scheduled to release current account figures. The account is expected to show a deficit of CZK 3.25 billion in December compared to a surplus of CZK 6.61 billion in November.
The German government is slated to conduct new 6-month Bubill auction at 5.00 am ET, with an aim to raise EUR 4 billion.
Poland's central bank is set to issue current account figures at 8.00 am ET. The current account deficit is seen at EUR 1.17 billion in December compared to EUR 1.034 billion shortfall in November.
European Economics Preview: German ZEW Economic Sentiment Survey Results Due
Economic sentiment survey results from Germany and inflation figures from the U.K. are the major statistical reports due on Tuesday. In addition, Spain and Italy are expected to step into the debt market after Moody's downgraded their sovereign ratings.
Hungary's statistical office is scheduled to issue inflation and final industrial output figures. Annual inflation is expected to accelerate to 5 percent in January from 4.1 percent in December.
At 4.30 am ET, U.K. inflation figures are due. Annual inflation is forecast to slow notably to a 14-month of 3.6 percent in January from 4.2 percent in December.
As inflation probably remained more than one percentage point above 2 percent for three straight months since Bank of England Governor Mervyn King wrote his last open letter, King is expected to write another letter to Chancellor George Osborne this week.
In the meantime, Spain is set to auction T-bills maturing in one year and 18 months. The 12-month bill auction is set to raise between EUR 2.5 billion and EUR 3 billion and 18-month bills to collect between EUR 1.5 billion and EUR 2 billion.
The rating agency Moody's has downgraded Spain, Italy and four other eurozone nations on Monday. Elsewhere, Standard & Poor's lowered its investment-grade credit ratings on 15 Spanish banks, a month after it cut its ratings on Spain.
The Mannheim based Centre for European Economic Research is scheduled to issue German economic sentiment survey data at 5.00 am ET. The economic confidence is seen improving to -11.8 in February from -21.6 in January.
In the meantime, Eurostat is scheduled to issue industrial production for the euro area. Economists forecast industrial output to fall 1.2 percent month-on-month in December after rising 0.1 percent in November.
The Italian government is set to raise between EUR 5 and EUR 7 billion from medium-long term debt auction. At the same time, Greece 13-weeks T-bill auction is also due.
Quarterly national accounts from Eurozone and other major member nations and Inflation Report from the Bank of England are the major reports due on Wednesday, headlining a hectic day for the European economic news.
At 1.30 am ET, the French statistical office Insee is scheduled to issue fourth quarter GDP data. Economists forecast the economy to shrink 0.2 percent sequentially.
Half an hour later, German GDP figures are due. The largest Eurozone economy is expected to contract 0.3 percent quarter-on-quarter after expanding 0.5 percent in the third quarter. Annually, the growth is seen slowing to 1.9 percent.
At 3.00 am ET, a slew of statistical reports are due. GDP figures from Hungary and the Czech Republic and inflation data from Spain are due. Czech GDP is expected to remain flat sequentially in the fourth quarter. Meanwhile, Hungary's economy is expected to grow 0.9 percent annually.
Italy's statistical office Istat is slated to publish quarterly national accounts at 4.00 am ET. The GDP is estimated to fall 0.6 percent in the fourth quarter after contracting 0.2 percent a quarter ago.
At 4.30 am ET, the Office for National Statistics is set to release U.K. labor market statistics for January. The claimant count rate is seen unchanged at 5 percent in January. The number of people claiming jobseekers' allowance is forecast to rise 3,000 in January.
Eurostat is set to issue Eurozone fourth quarter GDP data at 5.00 am ET. The 16-nation currency bloc is forecast to shrink 0.4 percent quarterly, following third quarter's 0.1 percent expansion.
The Bank of England is scheduled to issue Inflation Report at 5.30 am ET. The publication of the quarterly report will be followed by a press conference. The report will provide more understanding about inflation and output projections and its future course of action on quantitative easing.
The Portuguese government plans to raise between EUR 2.5 billion and EUR 3 billion from T-bill auction at 5.30 am ET.
European Economics Preview: ECB Monthly Bulletin, French Debt Auction Due
The European Central Bank's monthly bulletin is due today. In addition, France and Spain are set to enter the debt market to raise as much as EUR 14.3 billion.
At 2.00 am ET, the European Automobile Manufacturers' Association, or ACEA is scheduled to issue Europe's new car registration data for January. Registrations were down 6.4 percent in December.
At 3.00 am ET, the Czech Statistical Office is scheduled to issue consumer price figures for January. Annual inflation is forecast to rise to 3.2 percent from 2.4 percent in December. In the meantime, Turkey's consumer confidence and Spain's final GDP reports are due.
Half an hour later, Sweden's central bank is set to announce its interest rate decision. Riksbank is expected to cut its repo rate to 1.5 percent from 1.75 percent. At the same time, Sweden's inflation figures are also due. Annual inflation is forecast to remain at 2.3 percent in January.
The European Central Bank is slated to publish monthly bulletin at 4.00 am ET. Last week, the central bank maintained its record low 1.00 percent interest rate for the second month in a row.
In the meantime, Italy's trade and Norway's GDP figures are due. Mainland Norway is forecast to grow 0.5 percent sequentially in the fourth quarter after rising 1 percent in the third quarter.
The Spanish government plans to raise as much as EUR 4 billion in securities maturing in January and July 2015 and October 2019.
The French government plans to raise a maximum of EUR 8.5 billion in 2-year, 3-year and 5-year bonds. It will also auction index-linked bonds to raise EUR 1.8 billion. The results of the auction are due at 4.50 am ET.
Moody's on Monday downgraded the rating of Spain and five other Eurozone countries, citing the uncertainty over the euro area's prospects for institutional reform. Moreover, the agency lowered the outlook on the triple-A ratings of France to 'negative'.
Quotes from RBC Capital Markets:
-RBC's forecast is for USD/CAD to linger below parity to mid-year, with a trough of 0.98 in Q1.
-However, short of another distinct and material improvement in market risk sentiment, there are limits to the downside for USD/CAD.
-Specifically, key commodity prices that are relevant to Canada and CAD highlight that the domestic terms of trade are only marginally improving.
Japan Posts Biggest Trade Deficit in Jan, Raises Concerns About Japan’s Ability to Finance Its Debt
Japan's exports in Jan fell 9.3 pct y/y, slightly less than a 9.5 pct drop expected.
Exports fell for a 4th straight month, and compared to a 8.0 pct y/y decline in the previous month. Imports rose 9.8 pct y/y in Jan, higher than forecast for a 9.5 pct y/y rise.
The trade deficit stood at 1475 bln yen, against median market forecast for 1468 bln yen, a 4th straight month of deficit.
Japan's exports to China fell 20.1 pct y/y, while those to U.S rose 0.6 pct annually.
Data underlined concerns that a persistent trade gap may undermine the country's ability to finance its debt.
European Economics Preview: U.K. Public Sector Finance Data Due
Public sector finance from the U.K. is the major statistical report due on Tuesday, headlining a light day for the European economic news. Elsewhere, Spain is set to raise a maximum EUR 4 billion from the issue of short-term debt.
Earlier in the day, Eurozone finance ministers reached an agreement over a second bailout worth EUR 130 billion for Greece.
At 2.00 am ET, the Federal Customs Administration is slated to release Swiss external trade data. The trade surplus is forecast to rise to CHF 2.5 billion in January from CHF 2.01 billion in December.
In the meantime, Statistics Finland is scheduled to issue labor force survey results for January.
Swiss M3 money supply for January is due from the Swiss National Bank at 3.00 am ET. M3 money supply growth accelerated to 7.7 percent in December from 7.3 percent in November.
In the meantime, Hungary's gross wages for December are due. Economists forecast gross wages to rise 6.2 percent annually compared to November's 6 percent growth.
At 4.30 am ET, the Office for National Statistics is set to issue public sector borrowing figures. U.K. public sector net borrowing, excluding interventions, are seen at -GBP 6.3 billion in January compared to GBP 13.7 billion in December.
Elsewhere, Spain is set to enter the debt market. The government aims to get EUR 1.5 billion from 3-month treasury bills and EUR 2.5 billion from 6-month treasury bills.
China Manufacturing Sector Contracts For Fourth Month
China's factory activity shrank for a fourth consecutive month in February, as weak domestic demand as well as external weakness added downside risks to growth, a survey by Markit Economics revealed Wednesday.
The rate of contraction in the manufacturing activity, however, eased with the HSBC flash manufacturing purchasing managers' index rising to a four-month high of 49.7 in February from 48.8 in January. Nevertheless, with the reading being below 50, the sector is experiencing contraction.
The manufacturing output index was also at a four-month high of 50.1, bouncing back from 47.6 in January.
While output remained broadly unchanged, new orders continued to contract. New export orders shrank in February following an improvement in the previous month.
Growth remains on track of slowdown, despite the marginal improvement in the headline flash PMI led by quickened production after the Chinese New Year, HSBC chief economist Hongbin Qu said.
"With a meaningful rebound of domestic demand not in sight, external weakness is starting to bite, adding more downside risks to growth," the economist said, adding the People's Bank of China after delivering this year's first RRR cut, should step up policy easing as inflation pressures continue to ease.
Input prices remained unchanged during the month, while output prices continued to fall, albeit at a moderate pace, according to the survey.
Last week, the People's Bank of China decided to cut the banks' reserve requirement rate by 50 basis points for the second time in three months to boost lending amid sluggish economic growth.
The new CRR at 20.5 percent for large commercial banks will be effective from February 24. The Chinese economy expanded 8.9 percent in the fourth quarter of 2011, the slowest pace in more than two years, as a result of sluggish external demand and Beijing's past policy tightening to contain inflation and property prices.
Despite the slowdown in growth, the central bank refrained from an interest rate reduction. According to the latest official data, inflation accelerated for the first time in six months in January, triggered by higher spending during the Lunar new years holidays.
Inflation rose to a three-month high of 4.5 percent year-on-year in January from the 4.1 percent in the previous month.
European Economics Preview: German, U.K. GDP Data Due
Revised quarterly national accounts data from Germany and the U.K. are expected to dominate the economics scene on Friday. Elsewhere, Italy is set to enter the debt market today with a bond auction.
At 2.00 am ET, the Federal Statistical Office is scheduled to release German final GDP figures for the fourth quarter. The prior estimate showed a 0.2 percent quarterly contraction in the fourth quarter GDP.
French consumer confidence survey results are due at 2.45 am ET. The consumer sentiment is seen rising to 82 in February from 81 a month ago.
The Czech statistical office is set to publish consumer and business confidence survey data at 3.00 am ET. In the meantime, Spain's producer prices and Hungary's retail sales are due. Spain's producer price inflation is seen at 4.3 percent in January, down from 5.2 percent in December.
At 4.00 am ET, Italy's retail sales for December are due. On a monthly basis, sales are forecast to drop 0.5 percent month-on-month after falling 0.3 percent in November.
Half an hour later, second estimates of U.K. GDP is due from the Office for National Statistics. According to the previous estimate, the economy contracted 0.2 percent sequentially in the fourth quarter.
Italy is slated to raise a maximum of EUR 3 billion from the auction of Zero Coupon Bonds maturing on January 2014. The government also plans to issue inflation indexed bonds, with a maximum target of EUR 1.5 billion.
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