It’s a busy week for data, including US and UK retail sales for January, and February’s flash PMIs.
US
While the markets continue to wait for Joe Biden’s American Rescue Plan to be put into place – this week is expected to see the House Budget Committee finalise the legislation and the Rules Committee set out the parameters for the floor debate – the economic calendar will give an indication of how much it is needed.
Things, admittedly, start slow. Presidents’ Day on Monday, and an empty Tuesday data-wise, means the week may not get going until Wednesday. There, the Dow Jones et al. will be dealing with the retail sales for January – which could see an ugly post-Christmas drop-off – alongside the industrial production numbers.
Thursday then has the usual jobless claims reading, which jumped back towards 800,000 last week, joined by the Philly Fed manufacturing index and import prices.
Finally Friday has the flash manufacturing and services PMIs for February, indicative of how the economy has been holding up this month.
All of this is going to be very important for the Dow Jones. Now that the index is back in all-time high territory, essentially setting new records every time it rolls out of bed, there is arguably – or at least, there should be – extra scrutiny on every piece of American data, to see if the Dow’s current levels are justified. After all, we are still firmly in the midst of a pandemic.
Then again, investors seem solely focused on the incoming stimulus, so may not be receptive to analysing the intricacies of the week’s releases.
UK
Like the US, the UK’s week is back-loaded, truly starting with Wednesday’s inflation data, which is looking to improve on the previous month’s 0.6%.
Thursday has an appearance from MPC member Michael Saunders, with investors keen to hear his thoughts on negative interest rates.
Friday could then put the pound and FTSE through their paces, with January’s retail sales and February’s flash PMIs.
On top of that there is, of course, the ongoing discussions around the vaccine rollout, and when Lockdown 3.0 will be partially lifted. The further we get into February, the more pressing that conversation will become.
As for the corporate calendar, it’s a big one for the FTSE 100. There’s Vodafone (LON:VOD) on Monday, Glencore (LON:GLEN) and BHP Group on Tuesday, Rio Tinto (LON:RIO) on Wednesday, Barclays (LON:BARC) and Smith & Nephew on Thursday, and Natwest Group on Friday.
Eurozone
The Eurozone is slightly more consistent with its data releases this week, with region-wide industrial production on Monday, and a flash Q4 GDP reading and the latest ZEW economic sentiment numbers on Tuesday, before Friday’s flash PMIs.
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