Key Events In Developed Markets Next Week - Saturday, Feb. 13

Next week, US retail sales and industrial production data should show the US economy started 2021 on a strong footing, while Eurozone PMIs are likely to shed some light on the manufacturing recovery and if it is petering out. The UK will get inflation data but we think the reflation story is unlikely to stick.

US: Retail sales to rebound off stimulus checks, and industry data to show strength as well

Next week, the US data highlights will be retail sales and industrial production numbers for January and both should show the US economy started 2021 on a strong footing.

Daily credit and debit card transaction numbers show consumer spending jumped immediately after the $600 stimulus cheques started hitting bank accounts from early January and this suggests there is clear upside risk to the consensus forecast of a 0.8% month-on-month gain after a 0.7%MoM fall in December. We also know that car sales strengthened in January.

Meanwhile, factory activity remains strong based on information in the ISM survey while higher energy prices are leading to rising rig counts with 384 in operation at the end of January versus 348 at the end of December. Colder weather is also likely to boost utility demand. Rounding out the numbers, we have housing figures which should continue to benefit from record-low mortgage rates.

Eurozone: PMI and industrial data to shed light on the recovery

In the eurozone, the week starts with eurozone data on industrial and export performance in December. Expect a tick down from November for industrial production, which was influenced by a huge jump in Irish output.

Perhaps more important are PMI numbers that will come out on Friday, which should provide some insight into whether the manufacturing recovery is petering out as the second wave of the pandemic continues.

UK: Reflation is a key story in the US, but is it coming to the UK too?

For the time being, the data suggests that’s not the case. Inflation, like everywhere else, likely remained depressed by energy prices in January, while retail sales look set to plunge once more. More timely data has shown a post-Christmas dip in spending.

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