Eurozone inflation


On Friday, Eurozone final CPI inflation for January will be among the main events in the forex markets as traders look to see whether the data supports the hawks or the doves on the European Central Bank’s governing council.

Flash estimates showed prices rose by 1.3% from the same month in 2017, in line with expectations but it was the slowest annual pace since July and came after price growth cooled in December.  The more closely-watched core CPI rate, which strips out volatile components such as energy and food, climbed to 1% from 0.9% in December.

The data gives the ECB pause for thought: does it need to unwind stimulus as quickly as the hawks want, or is there still not the sustained uptick in underlying price pressures to warrant taking the foot off the gas? In spite of the Eurozone economy booming – growth hit a decade-high last year – the expansion in activity has yet to filter through to prices as the ECB persistently misses its 2% inflation target. The divergence between GDP growth and inflation is a headache for the ECB and makes its exit from QE more of a challenge.


FOMC minutes


With last week’s CPI beat ensuring US inflation remains the central focus for markets all eyes are on what course the Federal is plotting. Janet Yellen’s farewell meeting produced a marginally more hawkish statement than in the past, which coupled with rising inflation expectations in the US has market watchers forecasting more rate hikes than previously anticipated. Minutes from that meeting are due on Wednesday and will highlight to how members view the current economic outlook, where the risks are centred and to what extent they see inflationary pressures building.


UK average earnings


Following a fairly hawkish Bank of England meeting, UK interest rate expectations have advanced with markets pricing in a far greater chance of a hike in May than before. There is less slack in the economy than forecast and inflation is now expected to track lower more slowly as oil prices and domestic factors underpin price growth.

To some extent this will depend on wage growth picking up in order to support the Bank’s view that domestic inflationary pressures are building. Average earnings figures are due on Wednesday. Nevertheless, as we have seen with the pound’s retreat below $1.40 in spite of interest rate expectations rising, Brexit remains the key factor for sterling traders.

FTSE finals


A slew of final results are due from FTSE 100 and FTSE 250 companies on Thursday and Friday.

Anglo American (AAL), BAE Systems (BA.), Barclays (BARC), British American Tobacco (BATS), Centrica (CAN), International Consolidated Airlines Group (IAG), Royal Bank of Scotland Group (RBS), Standard Life Aberdeen Plc (SLA) and William Hill (WMH) are among the big hitters to report their full-year results this week.


Economic Calendar

(All times GMT)

Monday, 19 February

00:01 – UK Rightmove house price index

Tentative – German Buba monthly report

21:45 – New Zealand PPI inflation

Tuesday, 20 February

All day – Eurogroup meetings

00:30 – Reserve Bank of Australia monetary policy meeting minutes

07:00 – German PPI inflation

10:00 – German ZEW economic sentiment

10:00 – UK inflation report hearings

13:30 – Canada wholesale sales

Wednesday, 21 February

00:30 – Australia construction work done, wage price index

00:30 – Japan flash manufacturing PMI

04:30 – Japan all industries activity

08:00 – French flash manufacturing & services PMIs

08:30 – German flash manufacturing & services PMIs

09:00 – Eurozone flash manufacturing & services PMIs

09:30 – UK average earnings, unemployment rate

14:45 – US flash manufacturing & services PMIs

15:00 – US existing home sales

19:00 – FOMC meeting minutes

Thursday, 22 February

07:45 – French final CPI

09:00 – German Ifo business climate

09:30 – UK Q4 GDP second estimate, preliminary business investment

12:30 – ECB monetary policy meeting accounts

13:30 – Canada retail sales

13:30 – US weekly unemployment claims

16:00 – US crude oil inventories

21:45 – New Zealand retail sales

23:30 – Japan national core CPI, Tokyo CPI inflation

Friday, 23 February

07:00 – German final GDP

10:00 – Eurozone final CPI inflation

13:30 – Canada CPI inflation

Corporate Calendar


Monday, 19 February

Fidessa Group Plc (FDSA) – final results

McColls Retail Group plc (MCLS) – final results

Reckitt Benckiser Group Plc (RB.) – final results

MJ Gleeson plc (GLE) – interim results

Petra Diamonds Ltd (PDL) – interim results

Tuesday, 20 February

HSBC Holdings plc (HSBA) – final results

InterContinental Hotels Group plc (IHG) – final results

UBM plc (UBM) – final results

Domino’s Pizza (DPZ) – Q4/2017, EPS estimate 1.942

Home Depot (HD) – Q4/2018, EPS estimate 1.621

Walmart (WMT) – Q4/2018, EPS estimate 1.371

Wednesday, 21 February

Glencore plc (GLEN) – final results

Lloyds Banking Group plc (LLOY) – final results

Barratt Developments plc (BDEV) – interim results

Hotel Chocolat Group plc (HOTC) – interim results

Avis Budget Group (CAR) – Q4/2017, EPS estimate 0.207

Thursday, 22 February

Anglo American (AAL) – final results

BAE Systems plc (BA.) – final results

Barclays plc (BARC) – final results

British American Tobacco plc (BATS) – final results

Centrica plc (CNA) – final results

Intu Properties plc (INTU) – final resiults

KAZ Minerals plc (KAZ) – final results

Morgan Sindall Group Plc (MGNS) – final results

Playtech plc (PTEC) – final results

Rathbone Brothers plc (RAT) – final results

Go Ahead Group (GOG) – interim results

Hays plc (HAS) – interim results

Wilmington plc (WIL) – interim results

Hewlett Packard Enterprise (HPE) – Q1/2018, EPS estimate 0.223

Friday, 23 February

International Consolidated Airlines Group SA (IAG) – final results

Rightmove plc (RMV) – final results

Royal Bank of Scotland Group plc (RBS) – Q4 and final results

Standard Life Aberdeen Plc (SLA) – final results

William Hill plc (WMH) – final results

Foot Locker (FL) – Q4/2018, EPS estimate 1.249


Sources: Bloomberg/Companies

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