- Sterling buoyed by Manufacturing Output
Big week for Data
FED, ECB and EU leaders set to talk
Inflation, Growth and Retail Sales on the Agenda
Following last week's release of manufacturing output in the U.K. which was a major upside surprise, sterling rose by 1.5% against the euro, we have a slew of data releases on both sides of the Atlantic.
This will come as welcome relief to those economists and commentators who prefer tangible data to work with .
The past few weeks have been characterized by various views of the market expressed albeit by those “in the know” (certainly in the U.K. and Europe) but no we can see if what they said actually is true in reality.
Tomorrow sees the release of consumer price data in the U.K.which, despite a fall in January is expected to see a rise of 2.8% year on year. This is well above the Government's 2% target and was the subject of Kristin Forbes’ comments last week showing concern at continued loose monetary policy.
Eurozone growth is expected to rise at a mere 0.5% in contrast to Germany which is set to show growth of 1.8% and inflation touching 1.9%. Inflation in Germany has been rising steadily in the past few months (1.5% in November, 1.7% in December and now an expectation of 1.9% in January)
Industrial Production in the Eurozone is likely to have fallen by 1.5% putting further pressure on the ECB
The diversity of growth and inflation throughout the Eurozone will be a major concern to the ECB and should be touched upon by Mario Draghi in his press conference following the non-monetary policy meeting this week.
More Jaw Jaw from Central Bank Officials
Fed. Chair, Janet Yellen, is expected to make a speech later this week in which commentators will be interested to see if she will be more circumspect in her comments than she has recently. She has been accused of “painting herself into a corner” by outlining Fed policy in advance. This new forthcoming way of dealing with markets is echoed by BoE Governor Mark Carney who subscribes to an “advance guidance” way of dealing with press conferences.
This is welcomed by markets but can be alarming should the data not comply with the picture that is painted of the economies.
There is an EU Leaders Summit this week. Although there is no scheduled press conference, there will be plenty of sound bites, particularly form the more hawkish leaders concerning Brexit, forthcoming elections and The Greek situation.
A hoped for agreement over Greece’s debt issues was thrown into disarray over the weekend when the Greek Prime Minister stating that Greece would not accept any deal which adds to its financial burden.