Markets anticipate US and UK inflation data reports


  • Japan's GDP report for Q4 2022 and the incoming BoJ governor
  • The unemployment rate remained constant in December?
  • Second Estimate of Euro Area GDP for Q4 2022
  • Will Inflation in the UK Continue to Fall?
  • Is there an uptick in retail sales in the UK?

This week, investors and traders will be able to analyse a profusion of data sets, including statistics on inflation, gross domestic product (GDP), and retail sales. Inflation data from the United States and the United Kingdom will reveal whether or not monetary tightening has mitigated price increases.

Nominees for governor of the Bank of Japan (BoJ) will be presented to parliament in Japan. Economists have speculated that, with a new governor at the helm, the central bank may modify or even abandon its stimulus programme. After 10 years as governor, Haruhiko Kuroda will step down on April 8th.

Japan's GDP report for Q4 2022 and the incoming BoJ governor

On February 13th, the Japanese Cabinet Office will release the first estimate of GDP for the fourth quarter of 2022. Analysts following the Japanese economy expect the report to reflect a quarterly increase of 0.6%.

On Friday, February 10th, Japanese Finance Minister Shun'ichi Suzuki stressed the need of reversing deflation as a key policy problem. This week, the Japanese government will submit candidates to parliament for the Bank of Japan governorship.

The unemployment rate remained constant in December?

On Tuesday, February 14th, the Office of National Statistics (ONS) will likely release the ILO unemployment rate report. The unemployment rate in the United Kingdom probably stayed around 3.7% in the three months leading up to December, according to analysts. Salary increases are predicted to be lower than inflation in a separate analysis on median wages.

Andrew Bailey, Governor of the Bank of England, recently advised businesses and workers to factor in this year's expected precipitous drop in inflation when making financial decisions.

Second Estimate of Euro Area GDP for Q4 2022

The second estimate report for fourth-quarter 2022 GDP growth in the Eurozone will be released by Eurostat on Tuesday. The preliminary GDP figures for the Euro Area for the fourth quarter and full year of 2018 were issued on January 31. A Reuters poll had predicted a 0.1% decrease, thus the early result came as a surprise to market watchers.

"the headline GDP number presents a misleadingly favourable view of economic prospects in late 2022," stated S&P Global Market Intelligence economists. The data from the member states reveals a widespread decline in private spending, as households feel the pinch of rising inflation on their real wages.

The Fed will review the latest Consumer Price Index data from the United States.
The US Bureau of Labor Statistics (BLS) inflation report will round off Valentine's Day. According to the estimates of economic experts, yearly headline inflation fell to 6.2% in January. Inflation excluding food and energy is expected to have risen by 0.4% month over month. Inflation has started to decline, according to Federal Reserve Chairman Jerome Powell, but he believes it will take some time.

Observed OCBC Bank's currency strategists: "the overarching picture is the Fed performing policy calibration..." Nonetheless, the disinflation trend may be choppy in the near future, so caution is warranted in light of recent comments from Fed speakers.

Will Inflation in the UK Continue to Fall?

On February 15th, one of the most significant pieces of economic data will be released from the United Kingdom: the Consumer Price Index report. According to experts, annualised headline inflation fell to 10.2% in January from the previous month's 10.3%. The Bank of England has set a target inflation rate of 2%, yet current UK inflation is near to 40-year high.

The Office for National Statistics said on February 10 that the UK economy grew by zero percent in the fourth quarter of 2022, which was in accordance with forecasts made by economists. "Our economy is more resilient than many expected," Jeremy Hunt, the UK's finance minister, stated after the country avoided a recession and had the fastest expanding economy among the G7 last year. Inflation, in particular, shows that we are far from safe harbour.

Retail Sales in the United States: Shoppers Fight Inflation

In January, economists anticipate US retail sales to have increased by 0.9% month-over-month. Falling demand for automobiles and other consumer products contributed to a fall in November and December 2022 retail sales. The value of the US dollar might rise if the reading is high, while it could fall if it is low relative to other currencies.

More than two-thirds of economic activity in the United States is driven by consumer spending, and on January 27th, data indicated that real consumer expenditure (adjusted for inflation) fell by 0.3% in December 2022.

Is there an uptick in retail sales in the UK?

The ONS data on UK retail sales for January will be the main focus of market experts on Friday, February 17th. Monthly growth is expected to be flat, while annual growth is predicted at 1.8%. If the number comes in higher than predicted, the British pound may strengthen, but if it comes in lower, the pound might strengthen.

According to a British Retail Consortium (BRC) and KPMG analysis, retail sales increased by 4.2% year over year in January, which is down from 11.9% growth a year earlier and almost half the rate of December. 


Previous Post Next Post