MNI Global Week Ahead - German Election, EZ and US Inflation
See below for the key events in developed and emerging markets next week:
Developed Markets
SUNDAY - German Elections
Germany goes into a federal election on 23 February amid an upheaval in the country’s political landscape. Deep splits have emerged between major parties concerning the policies required to revive Germany’s flagging economy – and crucially the possibility of reform to the constitutional ‘debt brake’ – as well as how to deal with rising public anger over high levels of immigration and terrorist attacks. These domestic concerns do not exist in a vacuum and come during one of the most turbulent periods for regional and global geopolitics in years. The impact on German economic, domestic, and foreign policy remains uncertain and could come down to the number of parties represented in the Bundestag post-election. Should only the four main political parties cross the electoral threshold and win seats it will allow for a more stable twoparty coalition and smooth the path towards reform of the constitutional debt brake. However, with each additional party winning representation diluting the number of seats won by other parties the fine margins opinion polls are showing could see up to seven parties in the Bundestag. The situation outlined above could force the formation of a less stable three-party coalition and may limit the prospect of the required two-thirds majority being reached in favour of reforming the debt brake. In any case, coalition negotiations are going to take some time and it is unlikely that a new government with all cabinet positions assigned will be in place before the end of spring or even early summer. MNI’s core scenario for the German federal election sees a moderate ‘grand coalition’ being formed after the election between the Union parties (the CDU and CSU) and the SPD with CDU leader Friedrich Merz becoming chancellor at the expense of Olaf Scholz. This would be the first ‘GroKo’ since the 2017-21 government of then-Chancellor Angela Merkel.
TUESDAY / THURSDAY / FRIDAY - ECB Q4 Negotiated Wages and Feb Flash HICP
The Eurozone week-ahead is headlined by February flash inflation data from the four main member states, which together should give a good read on price pressures ahead of the Eurozone-wide release on Monday, March 3. Early consensus (all HICP) looks for a small deceleration in Germany (2.6% Y/Y vs 2.8% prior), an uptick in Italy (1.8% Y/Y vs 1.7% prior), and steady readings in France (1.8% Y/Y) and Spain (2.9% Y/Y). The ECB has expressed confidence in headline inflation returning sustainably to the 2% target during the course of this year, underscored by an expected deceleration in services inflation on the back of easing wage growth. Services inflation has been stuck around 4% Y/Y since November 2023. In a generally hawkish interview with the FT this week, Executive Board member Schnabel said she expects to start seeing services inflation moderate from February. This will be the primary focus for markets heading into the releases. A better understanding of current underlying services price pressures will be available in the January final HICP report due Monday. The ECB’s Q4 negotiated wages index will be released on Tuesday. Wage metrics over the past few weeks (ECB’s forward looking wage tracker and the Indeed wage tracker) have generally supported the bank’s base case for a moderation of labour costs. Next week’s data is not likely to shift market pricing for the March 6 meeting, where a 25bp cut remains essentially fully priced. However, it will be important in shaping consensus for the April and June gatherings. Following the February flash PMIs, OIS price 16bps of sequential easing through April and 18bps of easing through June.
TUESDAY - BOK Decision
The BOK surprised the market at their last meeting on January 16, with no change to monetary policy. Despite the no change, at the press conference the BOK Governor was clear that the Central Bank was in a rate cutting phase. Since that meeting, data has shown signs of improvement with January unemployment better than expected, January CPI m/m higher, FX Reserves lower (likely from defence of the Won) and the S&P Global South Korea PMI Manufacturing for January stronger. Early February export data was weaker than expected, though likely impacted by Lunar New Year Holidays. Market consensus has moved quickly towards a cut yet in recent weeks we have seen the BOK governor push back on the government suggesting that a fiscal response is needed to revive the ailing economy. Whilst the probability of rate cuts in the first half of 2025 remains high, given the US Federal Reserve’s more neutral approach, we expect the BOK to remain on hold next week, in a bid to support the currency and to continue pressure on the government.
THURSDAY / FRIDAY - US Q4 GDP 2nd Estimate and Jan PCE
The upcoming US economic calendar is backloaded, with the second release for Q4 national accounts on Thursday before the January PCE report on Friday. Real GDP growth is seen confirming what was at the time a softer than expected 2.3% annualized in Q4, whilst there will also be a first estimate for real GDI growth after 2.1% in Q3. Much of the relative GDP weakness in Q4 after two quarters averaging 3.0% came from a large drag from inventories. It should continue to show signs of robust domestic demand after personal consumption increased 4.2% annualized in the advance release.
However, January’s monthly report is likely to show consumption got off to a much weaker start of 2025. Recall that retail sales were far weaker than expected in January as they slid -0.9% M/M (cons -0.2) along with an even larger miss for the control group at -0.8% M/M (cons 0.3) to more than unwind the previously strong 0.8% M/M increase in December. Early days for the Bloomberg consensus currently see real personal spending growth of -0.1% M/M in Jan after 0.4% in Dec. As for inflation, Governor Waller cited estimates for core PCE inflation of around 0.25% M/M in January and it likely rounding to 2.6% Y/Y with some help from modest upward revisions. Base effects will have helped it drop from the 2.8% Y/Y averaged in Q4 whilst recent run rates should look a little more favorable (2.1% and 2.4% annualized over three and six months assuming no revisions). Note that revisions will go back to Q4, reflecting the new seasonal adjustment factors for both CPI and PPI, but longer dated revisions will have to wait for the comprehensive national account revisions due in September.
FRIDAY - Japan Tokyo CPI Data
February Tokyo CPI is expected to decelerate slightly to 3.2% Y/Y (vs 3.4% prior). Inflation excluding fresh food is also seen ticking lower to 2.3% Y/Y (vs 2.5% prior), while the ex-fresh food and energy metric is expected to rise to 2.0% Y/Y (vs 1.9% prior). The Tokyo CPI reading comes off the back of an acceleration in January national CPI (headline 4.0% Y/Y vs 3.6% prior, ex-fresh food 3.2% Y/Y vs 3.0% prior, ex-fresh food and energy 2.5% Y/Y vs 2.4% prior). OIS markets currently assign a 2% probability to a 25bp hike in March, a cumulative 58% chance by June, and fully price in a 25bp increase by September—a shift from late January when a hike wasn’t fully priced in until
October. Stronger data has been a key driver of this repricing, with Q4 GDP and December wages data surprising to the upside in recent weeks. January retail sales and industrial production data are also due next Friday.
Emerging Markets
TUESDAY - NBH Decision (Hungary)
The National Bank of Hungary are again expected to keep policy on hold this month, infitting with their guidance for the "maintenance" of tight monetary conditions. The last policy statement removed any reference to the possibility of easing policy - leaving scant expectations for rate cuts in the near-term. This messaging was underscored by the last decision being the first in three at which no members voted for easing. There remains uncertainty over the path of rates this year once Mihaly Varga formally leads the board, however the similar challenge on inflation limits the scope for rate cuts earlier than H2 this year.
WEDNESDAY - BOT Decision (Thailand)
The slow and steady path of economic growth continues in Thailand, giving limited reason for a cut in rates next week by the Bank of Thailand (“BOT”). The full year GDP growth rate was higher than 2023 at +2.5%, (2023 revised up to +2.0%) whilst the fourth quarter result missed estimates at +0.4% (estimate +0.5%). CPI however appears to be the main story with the NSA /m figure climbing into positive at +0.10%, following four months of deflation. Exports moderated in January to +8.4%, yet remain well above the 5 year average whereas Imports were extraordinarily strong up +13.4%. Consumer confidence has been an improving story in Thailand and whilst some private consumption data suggests moderating, the import numbers suggest that there could be more resilience built into the domestic economy than the numbers present. With expectations for cuts from the US Federal Reserve now moderating, there is no apparent need for the BOT to cut and as such we forecast no change at their meeting on February 26.
| Date | GMT/Local | Impact | Country | Event |
| 24/02/2025 | 0900/1000 | *** |  DE | IFO Business Climate Index |
| 24/02/2025 | 0900/0900 |  GB | BOE's Lombardelli remarks at BOE BEAR Conference | |
| 24/02/2025 | 1000/1100 | *** |  EU | HICP (f) |
| 24/02/2025 | 1315/0815 |  CA | BOC Deputy Gravelle speaks on BOE panel at "The Future of the Central Bank Balance Sheet" conference | |
| 24/02/2025 | 1315/1315 | GB | BOE's Ramsden and Saporta panellist on CB Balance sheet during QT | |
| 24/02/2025 | 1330/0830 | * | CA | Quarterly financial statistics for enterprises |
| 24/02/2025 | 1400/1500 | ** |  BE | BNB Business Confidence |
| 24/02/2025 | 1530/1030 | ** |  US | Dallas Fed manufacturing survey |
| 24/02/2025 | 1630/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 24/02/2025 | 1630/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 24/02/2025 | 1800/1800 | GB | BOE's Dhingra speech on state of the UK monetary policies | |
| 24/02/2025 | 1800/1300 | * | US | US Treasury Auction Result for 2 Year Note |
| 25/02/2025 | 0700/0800 | *** | DE | GDP (f) |
| 25/02/2025 | 0920/0420 | US | Dallas Fed's Lorie Logan | |
| 25/02/2025 | 1000/1000 | * | GB | Index Linked Gilt Outright Auction Result |
| 25/02/2025 | 1100/1100 | ** | GB | CBI Distributive Trades |
| 25/02/2025 | 1300/1400 | EU | ECB's Schnabel at BOE's Annual Conference on Balance Sheet | |
| 25/02/2025 | 1330/0830 | ** | US | Philadelphia Fed Nonmanufacturing Index |
| 25/02/2025 | 1355/0855 | ** | US | Redbook Retail Sales Index |
| 25/02/2025 | 1400/0900 | ** | US | S&P Case-Shiller Home Price Index |
| 25/02/2025 | 1400/0900 | ** | US | FHFA Home Price Index |
| 25/02/2025 | 1400/0900 | ** | US | FHFA Home Price Index |
| 25/02/2025 | 1400/0900 | ** | US | FHFA Quarterly Price Index |
| 25/02/2025 | 1400/0900 | ** | US | FHFA Quarterly Price Index |
| 25/02/2025 | 1400/1400 | GB | BOE's Pill remarks at BEAR Conference | |
| 25/02/2025 | 1500/1000 | *** | US | Conference Board Consumer Confidence |
| 25/02/2025 | 1500/1000 | ** | US | Richmond Fed Survey |
| 25/02/2025 | 1530/1030 | ** | US | Dallas Fed Services Survey |
| 25/02/2025 | 1645/1145 | US | Fed Governor Michael Barr | |
| 25/02/2025 | 1800/1300 | US | Richmond Fed's Tom Barkin | |
| 25/02/2025 | 1800/1300 | * | US | US Treasury Auction Result for 5 Year Note |
| 26/02/2025 | 0030/1130 | *** |  AU | CPI Inflation Monthly |
| 26/02/2025 | 0030/1130 | *** | AU | Quarterly construction work done |
| 26/02/2025 | 0700/0800 | ** |  SE | PPI |
| 26/02/2025 | 0700/0800 | * | DE | GFK Consumer Climate |
| 26/02/2025 | 0700/1500 | ** |  CN | MNI China Money Market Index (MMI) |
| 26/02/2025 | 0745/0845 | ** |  FR | Consumer Sentiment |
| 26/02/2025 | 0800/0900 | ** |  ES | PPI |
| 26/02/2025 | 1200/0700 | ** | US | MBA Weekly Applications Index |
| 26/02/2025 | - | EU | ECB's Lagarde and Cipollone in G20 FMs and CB Governors meeting | |
| 26/02/2025 | 1330/0830 | * | CA | Capital and repair expenditure survey |
| 26/02/2025 | 1330/0830 | US | Richmond Fed's Tom Barkin | |
| 26/02/2025 | 1500/1000 | *** | US | New Home Sales |
| 26/02/2025 | 1530/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 26/02/2025 | 1630/1630 | GB | BOE's Dhingra lecture on Trade fragmentation and monetary policy | |
| 26/02/2025 | 1630/1130 | ** | US | US Treasury Auction Result for 2 Year Floating Rate Note |
| 26/02/2025 | 1700/1200 | US | Atlanta Fed's Raphael Bostic | |
| 26/02/2025 | 1800/1300 | ** | US | US Treasury Auction Result for 7 Year Note |
| 27/02/2025 | 0030/1130 | * | AU | Private New Capex and Expected Expenditure |
| 27/02/2025 | 0745/0845 | ** | FR | PPI |
| 27/02/2025 | 0800/0900 | ** | SE | Economic Tendency Indicator |
| 27/02/2025 | 0800/0900 | *** | ES | HICP (p) |
| 27/02/2025 | 0800/0900 | *** |  CH | GDP |
| 27/02/2025 | 0900/1000 | ** | EU | M3 |
| 27/02/2025 | 0900/1000 | ** |  IT | ISTAT Consumer Confidence |
| 27/02/2025 | 0900/1000 | ** | IT | ISTAT Business Confidence |
| 27/02/2025 | 1000/1000 | ** | GB | Gilt Outright Auction Result |
| 27/02/2025 | 1000/1100 | * | EU | Consumer Confidence, Industrial Sentiment |
| 27/02/2025 | 1230/1330 | EU | Publication of MonPol Meeting Account | |
| 27/02/2025 | 1330/0830 | * | CA | Current account |
| 27/02/2025 | 1330/0830 | * | CA | Payroll employment |
| 27/02/2025 | 1330/0830 | *** | US | Jobless Claims |
| 27/02/2025 | 1330/0830 | ** | US | WASDE Weekly Import/Export |
| 27/02/2025 | 1330/0830 | ** | US | Durable Goods New Orders |
| 27/02/2025 | 1330/0830 | *** | US | GDP |
| 27/02/2025 | 1415/0915 | US | Kansas City Fed's Jeff Schmid | |
| 27/02/2025 | 1500/1000 | ** | US | NAR Pending Home Sales |
| 27/02/2025 | 1500/1000 | US | Fed Governor Michael Barr | |
| 27/02/2025 | 1530/1030 | ** | US | Natural Gas Stocks |
| 27/02/2025 | 1600/1100 | ** | US | Kansas City Fed Manufacturing Index |
| 27/02/2025 | 1645/1145 | US | Fed Governor Michelle Bowman | |
| 27/02/2025 | 1815/1315 | US | Cleveland Fed's Beth Hammack | |
| 28/02/2025 | 2330/0830 | ** |  JP | Tokyo CPI |
| 28/02/2025 | 2350/0850 | ** | JP | Industrial Production |
| 28/02/2025 | 2350/0850 | * | JP | Retail Sales (p) |
| 28/02/2025 | 0700/0800 | *** | SE | GDP |
| 28/02/2025 | 0700/0800 | ** | SE | Retail Sales |
| 28/02/2025 | 0700/0800 | ** | DE | Import/Export Prices |
| 28/02/2025 | 0700/0800 | ** | DE | Retail Sales |
| 28/02/2025 | 0700/0700 | GB | BOE's Ramsden speech on MonPol in geopolitical fragmentation | |
| 28/02/2025 | 0730/0830 | ** | CH | Retail Sales |
| 28/02/2025 | 0745/0845 | *** | FR | HICP (p) |
| 28/02/2025 | 0745/0845 | ** | FR | Consumer Spending |
| 28/02/2025 | 0745/0845 | *** | FR | GDP (f) |
| 28/02/2025 | 0800/0900 | ** | CH | KOF Economic Barometer |
| 28/02/2025 | 0855/0955 | ** | DE | Unemployment |
| 28/02/2025 | 0900/1000 | *** | DE | North Rhine Westphalia CPI |
| 28/02/2025 | 0900/1000 | *** | DE | Bavaria CPI |
| 28/02/2025 | 0900/1000 | ** | EU | ECB Consumer Expectations Survey |
| 28/02/2025 | 0900/1000 | *** | DE | Baden Wuerttemberg CPI |
| 28/02/2025 | 1000/1100 | *** | IT | HICP (p) |
| 28/02/2025 | 1300/1400 | *** | DE | HICP (p) |
| 28/02/2025 | 1330/0830 | *** | CA | GDP - Canadian Economic Accounts |
| 28/02/2025 | 1330/0830 | *** | CA | Gross Domestic Product by Industry |
| 28/02/2025 | 1330/0830 | *** | CA | CA GDP by Industry and GDP Canadian Economic Accounts Combined |
| 28/02/2025 | 1330/0830 | *** | US | Personal Income and Consumption |
| 28/02/2025 | 1330/0830 | ** | US | Advance Trade, Advance Business Inventories |
| 28/02/2025 | 1445/0945 | *** | US | MNI Chicago PMI |
| 28/02/2025 | 1600/1100 | CA | Finance Dept monthly Fiscal Monitor (expected) |
