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By HaleStewart February 8, 2015 8:45 am
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International Economic Preview For the Week of February 9-13

The following economic releases will have a disproportionate impact on the markets in the coming week.

Monday

India GDP: after slowing down to a series of prints below 5%, the last two readings have been above the 5% level.  This was occurring after the central bank raised interest rates to lower inflation – which has largely occurred.  Hopefully, we’ll see more of the same in this release.

China CPI: like other developed countries, China saw a drop in its YOY inflation rate in the 2H14, as rates fell from ~2.5% to ~1.5%.  Given dropping commodity prices and the Chinese slowdown, expect this trend to continue.

Tuesday

UK Manufacturing and Industrial Production: while both of these data sets have been increasing since the 3Q12, they are both still well below pre-recession levels.  However, strong numbers contained in the recent Markit survey point to continued improvement in this series.

Wednesday

Japanese CGPI: although the BOJ’s efforts to pump up the inflation rate through a massive increase in the monetary base bore initial fruit, the pace of YOY increases in this data series have been slowly slipping.  As the following graphs shows, PPI, export and import prices have been consistently dropping in contract currency terms since at least the last half of 2014.

Australia Unemployment Rate: this number has been slowing ticking up for the last year, rising from 5.4% to 6.1%.  This was one of the reasons the RBA recently lowered rates 25 basis points.  While the recent numbers from Australia have been OK, underlying business reports have showed an underlying weakness.

Thursday

EU Industrial Production: the EU IP rate, while positive, has been slowing ticking lower on a YOY basis over the last year.  But, recent Markit numbers point to a continued expansion, as they are mostly coming in around the 50 level.

UK Inflation Report: this report contains the BOEs economic projections and overall thoughts on the UK economy and its possible trajectory.  It’s basically a look into how the BOE is thinking.

US Retail Sales: while the pace of YOY increases came in over 4% for most of last year, December has a surprise drop to a bit over 3%.  Also remember that consumer spending as reported by the BEA also dropped during December.  Analysts attributed this to a longer holiday season that pulled sales forward into October and November. 

Friday

EU GDP: The EU has been just barely growing for the last year, a trend which is expected to continue with this report.          

Hale Stewart is a former bond broker who has been writing about economics and financial markets since 2006 on the Bonddad Blog.  He is also a tax attorney with a domestic and international practice while also forming and managing captive insurance companies for US companies.   You can follow him on twitter at:@captivelawyer         

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