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Market Report: 12 February 2018

 

There wasn’t a huge amount of economic data releases last week, but it was the releases from the previous week that set the tone. That week we had some US corporate results that disappointed and the very goods Non-Farm jobs numbers, but the market didn’t take too well the fact that wage growth had risen and the implications this would have on inflation and therefore the Federal Reserve’s planned path on interest rates. Markets sold off the previous week but the momentum only really picked up last Monday after the European close, at one point the Dow Jones fell off by more than 1500 points.

Given the record bull run that equity markets have had and the changing scenario of a steeper interest rate path, it should be fairly understandable that at some point there will be a selloff which many investors have been calling for.

The Bank of England also sounded a more hawkish tone in their latest minutes and inflation report while keeping rates on hold for the time being. Markets are now pricing in the possibility of a rate hike as early as May.

Market volatility continued throughout the last week and we are more than likely to see heightened volatility this week too. Both in the UK and the US this week we have the latest inflation reports, a big deviation versus the consensus, especially on the upside will get the market gyrations going again. In the UK the annualised rate is expected to drop to 2.9% while in the US it is expect to drop to 1.9%. Both countries will also publish the latest retail sales data. Investors will also keep a lookout on Japanese and Eurozone GDP figures along with industrial and manufacturing numbers from the US and Europe.

 

Author: Helal Miah, Investment Research Analyst

The Week Ahead

Important economic releases & events this week:

Date Country Event Period Consensus Prior
12-Feb-2018 JP Domestic CGPI NSA Y/Y JAN   3.1%
13-Feb-2018 UK CPI Core NSA Y/Y JAN 2.6% 2.5%
13-Feb-2018 UK CPI EU Harmonized NSA M/M JAN -0.60% 0.40%
13-Feb-2018 UK CPI EU Harmonized NSA Y/Y JAN 2.9% 3.0%
13-Feb-2018 UK ONS House Price NSA Y/Y DEC   5.1%
13-Feb-2018 UK Retail Price Index NSA M/M JAN -0.60% 0.80%
13-Feb-2018 UK Retail Price Index NSA Y/Y JAN 4.1% 4.1%
13-Feb-2018 JP GDP SA Q/Q (Preliminary) Q4 0.30% 0.62%
13-Feb-2018 JP GDP Y/Y (Preliminary) Q4 1.5% 2.1%
14-Feb-2018 CN Foreign Direct Investment Y/Y JAN   7.9%
14-Feb-2018 JP Retail Sales NSA Y/Y (Final) DEC 3.6% 3.6%
14-Feb-2018 EUZ GDP SA Q/Q (Second Preliminary) Q4 0.60% 0.60%
14-Feb-2018 EUZ GDP SA Y/Y (Second Preliminary) Q4 2.7% 2.7%
14-Feb-2018 EUZ Industrial Production WDA Y/Y DEC 4.2% 3.2%
14-Feb-2018 US CPI SA M/M JAN 0.30% 0.10%
14-Feb-2018 US CPI NSA Y/Y JAN 1.9% 2.1%
14-Feb-2018 US Retail Sales SA M/M JAN 0.30% 0.40%
15-Feb-2018 JP Industrial Production SA M/M (Final) DEC   2.7%
15-Feb-2018 EUZ Trade Balance SA DEC   €22.5B
15-Feb-2018 US Capacity Utilization NSA JAN 78.0% 77.9%
15-Feb-2018 US Industrial Production SA M/M JAN 0.20% 0.89%
15-Feb-2018 US Manufacturing Production M/M JAN 0.30% 0.08%
16-Feb-2018 UK Retail Sales SA M/M JAN 0.35% -1.5%
16-Feb-2018 UK Retail Sales SA Y/Y JAN 2.4% 1.4%
16-Feb-2018 US Housing Starts SAAR JAN 1,237K 1,192K
16-Feb-2018 US Michigan Sentiment NSA (Preliminary) FEB 95.5 95.7

 

Companies reporting this week

Date Company Name Event Description
13-Feb-2018 TUI Travel Ltd. Q1 2018 Earnings Release
13-Feb-2018 Pendragon Plc Q4 2017 Earnings Release
14-Feb-2018 Galliford Try Plc Q2 2018 Earnings Release
14-Feb-2018 Hargreaves Services Plc Q2 2018 Earnings Release
15-Feb-2018 Avon Products, Inc. Q4 2017 Earnings Release
15-Feb-2018 ConvaTec Group Plc Q4 2017 Earnings Release
15-Feb-2018 Primary Health Properties Plc Q4 2017 Earnings Release
15-Feb-2018 RELX Plc Q4 2017 Earnings Release
15-Feb-2018 Trifast Plc Q3 2018 Sales and Revenue Release
15-Feb-2018 Coca-Cola European Partners Plc Q4 2017 Earnings Release
15-Feb-2018 Indivior Plc Q4 2017 Earnings Release
16-Feb-2018 SEGRO Plc Q4 2017 Earnings Release

 

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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