- Eurozone inflation set to be surprising low – shock will be in EZ PPI print
- US wage growth set to remain behind inflation
- Australian GDP set to return to expansion – but for how long?
Tuesday 1st March
Chinese Manufacturing PMI data is due on Tuesday, with both the private Caixin survey and government prints for February set to be released. Expectations are that the former will once again show this sector of the economy in contraction, although state figures are tipped to give a rather more upbeat response. Given the current geopolitical backdrop, this number in isolation seems unlikely to drive much interest, but the future direction of energy prices paid by Beijing may be instrumental in understanding where the Chinese economy goes next.
UK Consumer Credit data for January will also be issued on Tuesday, with expectations of net expansion being seen here, albeit at a slower rate than was posted in December. The big risk here is economic uncertainty weighing on that propensity to consume and with headwinds building, it’s a question of just how steeply this number declines. Forecasts suggest an increase of around £750 million for January, down from £1.1 billion in the previous month.
Wednesday 2nd March
On Wednesday, Australian GDP data for Q4 should reverse the negative print seen in Q3 and keep the country away from a technical recession. Forecasts suggest a print as high as 2.5% may be seen off the Q3 reading of -1.9%. However, with the economy continuing to work its way out of the pandemic and given the Chinese economy is slowing too, this does suggest the outlook may remain difficult.
Also on Wednesday, Eurozone Flash Inflation figures for February are due. These are expected to come in at just over 5%, which is comparatively modest given the skyrocketing input costs which are being observed right now. A number this reserved would likely be welcomed by the ECB, but with oil trading around the $100/barrel level and other commodities in short supply, ant respite here could well remain transitory.
Friday 4th March
Finally, the US ADP Payroll Survey for February will also be released, offering some early indications ahead of the non-farms on Friday. Following last month’s contraction, growth is expected to resume here but this does again underline the idea that the US economy may be close to plateauing. Estimates suggest around 350,000 new jobs will be added, with the risk arguably being on the downside here.
Eurozone PPI data for January will be published on Thursday. In light of Wednesday’s inflation data, this is likely to jar somewhat and could show annualised growth running in excess of 25%. On the basis that companies cannot absorb that sort of uptick in their margins, this suggests there’s still a lot more to feed through into the prices consumers are paying. Whilst the ECB are known to be happy to tolerate some inflation, added to the soaring cost of oil and it could make for a challenging summer, with further Euro weakness being the result.
Rounding out the week, we have a slew of employment stats from the US. The Non Farm Payrolls always headline here, but arguably of more interest will be February’s Average Hourly Earnings. These are expected to improve slightly from last month’s 5.7%, but that’s still well behind CPI and risks denting consumer confidence if real wages are contracting. Add to that the Fed’s ambitious rate hike plans for the year ahead and it will do little to cheer the already battered sentiment amongst US equity markets.