The Week Ahead – Economic Data and Capitol Hill in Focus

On the Macro

It’s a relatively busy week ahead on the economic calendar, with 51 stats in focus in the week ending 26^th February. In the week prior, 72 stats had been in focus.

For the Dollar:

In the 1^st half of the week, consumer sentiment figures for February are in focus. Following some disappointing Michigan numbers, expect a slide in the CB Consumer Confidence Index to test support for riskier assets.

After a quiet Wednesday, the focus then shifts to a busy end to the week.

On Thursday, core durable goods, 2^nd estimate GDP numbers, and the weekly jobless claims are in focus.

Expect the numbers to draw plenty of attention ahead of inflation, trade, and personal spending figures on Friday.

With increased sensitivity to inflation, we can expect both the inflation and personal spending figures to be influence.

Other stats in the week include housing sector data, Chicago PMI figures, and finalized Michigan consumer sentiment numbers.

Barring dire numbers, however, the stats will likely have a muted impact on the markets.

The Dollar Spot Index ended the week down by 0.13% to 90.364.

For the EUR:

It’s a quieter week ahead on the economic data front.

In the 1^st half of the week, German business confidence figures for February are due out. Expect the headline IFO Business Climate Index to be the key driver.

On Wednesday and Thursday, the German economy remains in focus. 2^nd estimate GDP numbers for the 4^th quarter and March consumer sentiment figures will draw attention.

Barring revisions to GDP numbers, expect the consumer sentiment figures to have the greatest influence.

At the end of the week, French consumer spending and 2^nd estimate GDP numbers for the 4^th quarter will wrap things up.

Once more, barring a marked revision to 1^st estimate numbers, expect the consumer spending figures to be the key driver.

The EUR ended the week down by 0.01% to $1.2119.

For the Pound:

It’s a relatively quiet week ahead on the economic calendar.

December’s unemployment rate and January claimant count figures will be the key drivers.

Wage growth and 3-month rolling employment change figures will likely have less impact on the Pound.

Away from the stats, expect the UK government’s progress on vaccines and COVID-19 news to continue to influence.

The Pound ended the week up by 1.21% to $1.4016.

For the Loonie:

It’s a particularly quiet week ahead on the economic calendar.

Economic data is limited to January RMPI figures due out on Friday.

While we expect the numbers to influence, crude oil inventory numbers and market risk sentiment will also provide direction.

The Loonie ended the week up by 0.64% to C$1.2615 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s another relatively quiet week.

Key stats include 4^th quarter private CAPEX and construction work done, along with private sector credit figures for January.

Expect CAPEX and private sector credit figures to have the greatest influence in the week.

The Aussie Dollar ended the week up by 1.30% to $0.7869.

For the Kiwi Dollar:

It’s a busier week ahead on the economic calendar.

4^th quarter retail sales figures kick things off on Tuesday. With borders closed, expect any weak numbers to test support for the Kiwi.

On Thursday, business confidence figures will also provide direction along with trade data on Friday.

The main event of the week, however, will be the RBNZ monetary policy decision on Wednesday…

After the RBA’s surprise move earlier in the month, will the RBNZ catch the markets off guard?

The Kiwi Dollar ended the week up by 1.05% to $0.7299.

For the Japanese Yen:

It is another busy week ahead.

February inflation and January industrial production and retail sales figures are in focus on Friday.

Expect the industry production and retail sales figures to have the greatest impact on the markets.

Ultimately, however, the numbers are unlikely to have too much impact on the Yen.

The Japanese Yen ended the week down by 0.49% to ¥105.45 against the U.S Dollar.

Out of China

It’s another quiet week ahead. There are no material stats due out of China to provide riskier assets with direction in the week.

The lack of stats will leave geopolitics in focus…

On the monetary policy front, the PBoC is in action on Monday. The markets are expecting the PBoC to leave loan prime rates unchanged, however.

The Chinese Yuan ended the week up by 0.01% to CNY6.4577 against the U.S Dollar.

Geo-Politics

U.S Politics

Capitol Hill and U.S foreign policy remain key areas of focus.

The markets will likely pay close attention to news updates on planned talks between the U.S and Iran.

There’s also China to keep an eye on.

On the fiscal stimulus front, there will be the hope of the Democrats delivering on the $1.9 trillion relief package this week.

COVID-19

Vaccination rates and availability of vaccines will remain a key area of interest.

As vaccines become more readily available, the next step is for key economies to ease restrictions.

New strains of the virus could weigh on a near-term economic recovery, however.