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Market Report: 20 February 2017

Last week there were a couple of economic announcements from the UK, the US and the EU. On Tuesday, the latest UK CPI figures were released. Inflation rose by 0.5%, same as the previous month, while the annual estimate increased by 1.8%, slightly below than the market consensus. Also on Tuesday, latest update on the economic growth in the EU was announced. The results went in line with the economists’ expectations and in the fourth quarter of 2016 the EU GDP grew by 0.4%. The year-over-year data showed 1.7% increase.

The UK Labour Market Report, published on Wednesday, revealed a robust job market at the end of 2016. The number of unemployment claimants fell further than expected in December down by -42,400. The ILO Unemployment rate remained the same as the prior estimate at 4.8%.

Later the same day, the first inflation figures under the new US president were announced. The US CPI rose double than forecasted in January, up to 0.6%. However, the annual increase matched the analysts’ expectations of 2.5%.

Finally, the most surprising data came from the UK on Friday. The retail sales were unexpectedly poor and fell -0.3% in January. This contributed to the year-on-year growth in sales was 1.5%, far below the expectations of 2.7% increase. Economists argue that this drop in consumer confidence, mainly in food and petrol, may be the first sign of Brexit impact on the economy as exit negotiations are approaching.

The most important economic data in the week ahead will be released again from the EU, the UK and the US. The flash Composite Purchasing Managers' Index in the Eurozone, which provides an early estimate of current private sector output, will be launched on Tuesday. Analysts expect slightly lower economic activity in the EU in February, forecasting 55.0, while the prior number was 55.2.

Later on Tuesday, the US PMI will be also published. Economists do not expect changes in the volume of economic activity in February and set the market consensus at 55.0, the same as in January.

Revisions to the UK Q4 GDP number are published on Wednesday, the QoQ figure is expected to remain unchanged at 0.6% while the year on year figure could see a slight revision up to 2.2%. On the same day, the ECB will release the January inflation figures in the EU. Economists expect that inflation slowed down in February to -0.8%, but the year-over-year forecast is set the same as the prior figure of 1.8%. 

Author: Helal Miah, Investment Research Analyst

The Week Ahead

Important economic releases & events this week:

DateCountryEventPeriodConsensusPrior
MonUKCBI Industrial Trends Export Order NSA M/MFEB  -9.0 
MonUKCBI Industrial Trends Total Orders NSA M/MFEB  5.0 
MonEUZConsumer Confidence Indicator (Flash)FEB -5.0 -4.9 R 
TueEUZMarkit PMI Composite SA (Preliminary)FEB 54.5 54.4 
TueEUZMarkit PMI Manufacturing SA (Preliminary)FEB 55.0 55.2 
TueEUZMarkit PMI Services SA (Preliminary)FEB 53.9 53.7 
TueUSMarkit PMI Manufacturing SA (Preliminary)FEB 55.0 55.0 
TueUSMarkit PMI Services SA (Preliminary)FEB 55.3 55.6 
WedUKGDP SA Q/Q (Second Preliminary)Q4 0.60% 0.60% 
WedUKGDP SA Y/Y (Second Preliminary)Q4 2.2% 2.0% 
WedEUZCPI Core NSA Y/Y (Final)JAN 0.90% 0.90% 
WedEUZCPI NSA M/MJAN -0.80% 0.50% 
WedEUZCPI EU Harmonized Y/Y (Final)JAN 1.8% 1.8% 
WedUSExisting Home Sales SAARJAN 5,550K 5,490K 
WedUSFOMC Minutes   
ThuUSContinuing Jobless Claims SA02/11 2,076K 2,076K 
ThuUSInitial Claims SA02/18 239.0K 239.0K 

Companies reporting this week: 

DateCompany NameEvent TypeEvent Description
MonHammerson PlcConfirmed ReleasesQ4 2016 Earnings Release
MonVedanta Resources PlcConfirmed ReleasesQ3 2017 Sales and Revenue Release - Production Report
TueBHP Billiton PlcConfirmed ReleasesQ2 2017 Earnings Release
TueHSBC Holdings PlcConfirmed ReleasesQ4 2016 Earnings Release
TueAnglo American PlcConfirmed ReleasesQ4 2016 Earnings Release
TueInterContinental Hotels Group PlcConfirmed ReleasesQ4 2016 Earnings Release
WedBarratt Developments PlcConfirmed ReleasesQ2 2017 Earnings Release
WedLloyds Banking Group PlcConfirmed ReleasesQ4 2016 Earnings Release
ThuBAE Systems PlcConfirmed ReleasesQ4 2016 Earnings Release
ThuBritish American Tobacco PlcConfirmed ReleasesQ4 2016 Earnings Release
ThuCentrica PlcConfirmed ReleasesQ4 2016 Earnings Release
ThuGenus PlcConfirmed ReleasesQ2 2017 Earnings Release
ThuHowden Joinery Group PlcConfirmed ReleasesQ4 2016 Earnings Release
ThuIntu Properties PlcConfirmed ReleasesQ4 2016 Earnings Release
ThuMondi PlcConfirmed ReleasesQ4 2016 Earnings Release
ThuRELX PlcConfirmed ReleasesQ4 2016 Earnings Release
ThuRSA Insurance Group PlcConfirmed ReleasesQ4 2016 Earnings Release
ThuBarclays PlcConfirmed ReleasesQ4 2016 Earnings Release
ThuGlencore PlcConfirmed ReleasesQ4 2016 Earnings Release
FriInternational Consolidated Airlines Group SAConfirmed ReleasesQ4 2016 Earnings Release
FriPearson PlcConfirmed ReleasesQ4 2016 Earnings Release
FriWilliam Hill PlcConfirmed ReleasesQ4 2016 Earnings Release
FriRoyal Bank of Scotland Group PlcConfirmed ReleasesQ4 2016 Earnings Release
FriStandard Life PlcConfirmed ReleasesQ4 2016 Earnings Release
FriStandard Chartered PlcConfirmed ReleasesQ4 2016 Earnings Release

Author: Helal Miah, Investment Research Analyst

Glossary

PMI: Purchasing Managers Index

CPI: Consumer Price Index

GDP: Gross Domestic Product

BOE: Bank of England

ECB: European Central Bank

FOMC: Federal Open Market Committee

BOJ: Bank of Japan

ISM: Institute for Supply Management

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