The Economic Week Ahead

Main Macro Events This Week

United States: The US economic calendar is a fairly full one heading into the FOMC decision, starting off (Tuesday) with February retail sales seen sinking 0.2% (median 0.1%) vs +0.2% in January, or -0.3% ex-auto (median 0.1%). We see some downside risks from chain store sales, gasoline prices and vehicle sales relative to the more upbeat consensus. PPI is forecast to sink 0.3% in February (median -0.1%), likely rising 0.1% ex-F&E, while the Empire State may rebound to -12.0 in March (median -13.3) vs -16.6. Business inventories are expected to be unchanged in January, while the NAHB housing market index may rise to 59 in March vs 58 and TIC data is due. That brings us to the FOMC decision day (Wednesday) with some last-minute updates, including the MBA report, CPI seen falling 0.2% in February (median 0.1%) or +0.1% ex-F&E, as inflation continues to elude the Fed. Housing starts are on tap as well, expected to gain 2.8% to a 1,130k pace in February (median 1,150k), while industrial production is set to sink 0.5% in February (median -0.1%) vs 0.9%. After the FOMC decision the calendar resumes (Thursday) with several updates, including the Philly Fed index, which is primed to tick back up to -1.0 in March (median -1.1) vs -2.8. The current account gap may narrow to -$114 bln in Q4 (median -$116.3 bln) vs -$124.1 bln in Q3. Next is initial jobless claims forecast to hold steady at 259k (median 265k), while February leading indicators are set to rebound to 0.3% (0.2% median) from -0.2%. Yellen favorite JOLTS data is due Thursday, but Michigan sentiment (Friday) caps it all off with a potential uptick to 92.0 in March preliminary data (median 92.2) from 91.7 in final February report.

Canada: The Canadian calendar will solidify the January GDP outlook, with manufacturing, wholesale and retail sales due out. Manufacturing (Wednesday) is expected to rise 0.5% m/m in January after the 1.2% gain in December. Wholesale sales are seen up 0.3% m/m in January following the 2.0% surge in December. Retail sales are projected to gain 0.5% in January after the 2.2% drop in December. Retail sales are expected to dip 0.2% in January after the 1.6% drop in December as lower gasoline prices weigh. CPI is seen rising 0.1% m/m (nsa) in February after the 0.2% gain in January. CPI is expected to slow to a 1.3% y/y growth rate (nsa) in February from the 2.0% pace in January. The Bank of Canada’s core CPI measure is seen accelerating to a 2.2% y/y clip in February from 2.0% in January. February existing home sales (Tuesday) and the February Teranet/National HPI (today) are due early in the week. There is nothing from the Bank of Canada this week.

Europe: European calendar has final readings for February inflation numbers, with the overall CPI reading expected to be confirmed at -0.2% y/y. The Eurozone also has trade data and industrial production numbers for January, but overall the week is quiet, leaving markets to digest the ECB policy meeting.

United Kingdom: The calendar this week is highlighted by the March BoE MPC monetary policy meeting (announcing Thursday). The data schedule is Spartan, featuring BoE job market data covering January and February (Wednesday).

China: February foreign direct investment (tentatively due Tuesday) is forecast to have fallen 3.3% y/y versus the -3.2% seen in January.

Japan: In Japan, the BoJ meeting on Tuesday will highlight, though we expect the Bank to stand pat following its entrance into the NIRP club last month. The BoJ is expected to adopt a wait-and-see stance going forward, as it assesses the impact of negative rates. Talk of fresh fiscal stimulus has been getting louder, with the most likely first steps being a delay of the next round of sales tax increase, and perhaps even a cut to the current sales tax. On the economic data front, January machine orders (today) were expected to rise 2.0% m/m from the prior 4.2% increase but beat expectations rising by 15%. Revised January industrial production (Tuesday) is seen unchanged at 3.7%, while the January tertiary index (Wednesday) is forecast to rise 0.1% versus the 0.6% decline in December. The February trade report (Thursday) is penciled in for a JPY 400 bln surplus, from the revised JPY 648.8 bln deficit in January.

Australia: Australia’s calendar has the minutes to the March RBA meeting (Tuesday). The economic data calendar features February employment (Thursday), expected to bounce back 20.0k following the 7.9k drop in January. The unemployment rate is seen at 5.8% in February from 6.0% in January. There is double bill of RBA speakers this week, with Debelle (Thursday) and Ellis (Friday) on the docket. Assistant Governor (Financial Markets) Debelle speaks at the FX Week Australia conference in Sydney. Luci Ellis, Head of the Financial Stability Department speaks at the Financial Risk Day 2016 conference in Sydney.