MNI Global Week Ahead - UK Labour Market and CPI Data In Focus

See below for the key events in developed and emerging markets next week:

Developed Markets

MONDAY / FRIDAY - Japan Q4 GDP and January CPI

Japan Q4 GDP is expected to be similar to Q3 in terms of q/q headline momentum. Greater focus may rest with the make up of GDP growth. The market expects a dip in consumer spending but still positive business investment. A firmer consumer spending backdrop is seen as key to the BoJ outlook. National CPI is expected to rise in headline terms to 4.0% y/y, but core measures are forecast to be more benign. Q1 will see some impact from energy subsidies returning, but underlying price trends still appear consistent with a gradual move towards the BoJ's inflation target of 2%. 

TUESDAY - RBA Decision 

The RBA decision and updated forecasts are released on February 18. The market and local analysts are fairly sure that it will cut rates by 25bp to 4.10% to begin its easing cycle following Q4 headline and trimmed mean CPI inflation printing 0.2pp below its November projections. It is very rare for the central bank to go against market expectations but the data have not suggested a change in the economic outlook, services inflation remains elevated and the labour market is tight. There continue to be reasons to stay on hold, but the lower inflation prints and market pricing may be enough for a cut.

TUESDAY - Canada January CPI

Tuesday’s January CPI report is the sole CPI release since the Jan 29 decision. The market currently sees a little less than 50/50 odds of another 25bp cut on Mar 12, slightly leaning in favour of a pause, although US tariff deliberations are likely a more important factor. The initial 25% tariffs on all Canadian products except for 10% on energy products saw a 30-day postponement until Mar 4 after Canada agreed to bolster border security, whilst 25% tariffs specifically on steel & aluminium is currently set for Mar 10. With downside risks to Canadian growth, GDP data for Q4 and the January advance on Feb 28 should be watched increasingly closely after recent signs of prior monetary policy easing boosting activity. With those points in mind, the early days for Bloomberg consensus currently sees headline CPI holding at 1.8% Y/Y whilst median is unchanged at 2.4% Y/Y and trim inches a tenth higher to 2.6% Y/Y (BoC target range 1-3%). Remember that Senior Dep Gov Rogers downplayed the strength seen in CPI-trim at last month’s BoC press conference, saying the way it’s calculated has led them not to put much weight on it at this point in time. That leaves only one of its three 'new' core measures actively watched, CPI-median, having earlier in the cycle abandoned CPI-common. All else equal, we imagine this will start to see greater market focus on the more traditional core metrics such as CPIxFE and CPIX. The temporary GST/HST holiday will continue to impact inflation readings this month.

TUESDAY / WEDNESDAY / FRIDAY - Key UK Data

It’s another key week for UK data with labour market data (Tues), CPI (Wed) and the flash PMI (Fri) all due for release, and it is debatable whether inflation or PMI data are the primary focus right now (official labour market data seems to have fallen behind these in the pecking order but still has potential to cause large market moves on surprises). Starting with the January inflation release on Wednesday, the Bank of England forecast headline CPI at 2.816%Y/Y (with the early Bloomberg consensus also at 2.8%; prior 2.503%). The closely watched services CPI is expected by the BOE to increase to 5.161%Y/Y (consensus also 5.2%) from the low 4.367% print in December, but both Oct/Nov prints were just above 5.0%. The reversal of the timing-induced very low December air fares print is the main expected contributor to the increase in both headline and services CPI, with VAT on private school fees and a 50% increase in bus fares also contributing to both. Fuel is the other component expected to add to headline CPI. The flash PMI data will be watched as an increasing number of MPC members appear to be more attuned to growth concerns as the primary downside risk. On the labour market side, a rise in official AWE earnings data has been down downplayed in recent BOE communications as being inconsistent with other wage releases, and the quantity side is still impacted by low survey numbers. The data is still watched by the market, but we are seeing increasing arguments that HMRC payroll / wage data are appearing to look like more reliable data than LFS/AWE series.

WEDNESDAY - RBNZ Decision

With inflation around the mid-point of the RBNZ's band and activity continuing to be soft, another 50bp of easing on February 19 remains the central case. It had this size of cut in its November projections and Chief Economist Conway said that easing domestic price intentions and inflation expectations should allow the MPC to cut the OCR further as "signalled in November". The outlook for subsequent meetings is less clear. The RBNZ will also release updated economic projections. 

WEDNESDAY - FOMC Minutes

The minutes to the January 28-29 FOMC meeting (due out 1400ET/1900GMT Wednesday) will be scrutinized primarily for three things. First, why did the Fed decide to remove the Statement language that said inflation "has made progress toward the Committee's 2 percent objective", while retaining the more worrisome clause "remains somewhat elevated"? Chair Powell said that the FOMC wasn't intending to send a signal with this, but we wonder whether there was a substantive discussion about a disappointing lack of disinflationary progress since the easing cycle began in September. Second, and related, was there any discussion of a scenario in which the FOMC's next move could be a hike rather than a cut? It's probably too early for such talk to appear in the official minutes, but we have seen small hints of this shift in opinion from FOMC hawks' commentary since January. Third, was there any further discussion or analysis regarding the potential impact of the new presidential administration's policy shifts? Powell said that "we need to let those policies be articulated before we can even begin to make a plausible assessment of what their implications for the economy will be", but even so, we will be attentive to any broad strokes with which FOMC participants are thinking about these matters (are tariffs seen as inflationary/ stagflationary/ neither?). Outside of immediate policy matters, one longer-term consideration that could come out of these minutes is whether there are any details around the framework review launched at this meeting.

FRIDAY - Eurozone February Flash PMIs

Next week’s regional calendar is headlined by the February flash PMIs (Friday). Early Bloomberg consensus looks for the composite reading to tick up to 50.5 (vs 50.2 prior). This would be a third consecutive increase. Services is seen at 51.5 (vs 51.3 prior) while the manufacturing consensus is 47.0 (vs 46.6 prior).  Although the ECB has expressed confidence in the medium-term inflation outlook, price components will be keenly watched after the January survey reported the highest level of output charge inflation in five months. Naturally, the impact of US tariff uncertainty will also be in focus.  At a country level, the German manufacturing PMI is expected to rise to 45.5 (vs 45.0 prior), with services steady at 52.5. Uncertainty around the upcoming election (Feb 23) may have an impact this month. In contrast, near-term French political risks have subsided a little with PM Bayrou successfully forcing his 2025 budget through the National Assembly. The French manufacturing PMI is seen at 45.3 (vs 45.0 prior), with services at 49.0 (vs 48.2 prior).  A number of analysts have flagged the risk of post-covid residual seasonality inflating the PMIs in Q1 2025. As such, it is important not to overreact to soft signals that a Eurozone cyclical is firmly underway. Next week also sees December merchandise trade (Monday) and current account (Wednesday) data, which will be eyed for any signs of US export front-loading into year-end. 

Emerging Markets

WEDNESDAY - BI Decision (Indonesia)

Bank Indonesia (BI) unexpectedly cut rates 25bp to 5.75% at its January meeting. We don't expect it to repeat the move on February 19 as USDIDR is elevated at 16359 and the IDR NEER is also lower and near-term Fed easing is less likely and so it is likely to be firmly focused on rupiah stability this month. With Q4 growth at 5.0%, further rate cuts aren't urgent and it continues to use macroprudential policies to support lending and the economy.

FRIDAY - PBOC Decision (China)

 The PBOC is expected to maintain its 1- and 5-year Loan Prime Rates at 3.10% and 3.60% respectively on Friday. 

Date	GMT/Local	Impact	Country	Event
17/02/2025	2350/0850	***	JP	GDP
17/02/2025	-		AU	Reserve Bank of Australia Meeting
17/02/2025	0700/0800	**	SE	Unemployment
17/02/2025	0800/0900		CH	Flash GDP
17/02/2025	1000/1100	*	EU	Trade Balance
17/02/2025	-		EU	ECB's Lagarde and Cipolllone in Eurogroup meeting
17/02/2025	1315/0815	**	CA	CMHC Housing Starts
17/02/2025	1330/0830	*	CA	International Canadian Transaction in Securities
17/02/2025	1430/0930		US	Philadelphia Fed's Pat Harker
17/02/2025	1520/1020		US	Fed Governor Michelle Bowman
17/02/2025	2300/1800		US	Fed Governor Christopher Waller
18/02/2025	0330/1430	***	AU	RBA Rate Decision
18/02/2025	0700/0700	***	GB	Labour Market Survey
18/02/2025	0700/0800	***	SE	Inflation Report
18/02/2025	0745/0845	***	FR	HICP (f)
18/02/2025	0930/0930		GB	BOE's Bailey fireside chat on open financial markets
18/02/2025	1000/1000	**	GB	Gilt Outright Auction Result
18/02/2025	1000/1100	***	DE	ZEW Current Expectations Index
18/02/2025	-		EU	ECB's De Guindos in ECOFIN meeting
18/02/2025	1330/0830	***	CA	CPI
18/02/2025	1330/0830	**	US	Empire State Manufacturing Survey
18/02/2025	1400/0900	*	CA	CREA Existing Home Sales
18/02/2025	1400/1500		EU	ECB's Cipollone in MNI Connect conference on Balance Sheet
18/02/2025	1500/1000	**	US	NAHB Home Builder Index
18/02/2025	1520/1020		US	San Francisco Fed's Mary Daly
18/02/2025	1630/1130	*	US	US Treasury Auction Result for 26 Week Bill
18/02/2025	1630/1130	*	US	US Treasury Auction Result for 13 Week Bill
18/02/2025	1800/1300	**	US	US Treasury Auction Result for 52 Week Bill
18/02/2025	1800/1300		US	Fed Governor Michael Barr
18/02/2025	2100/1600	**	US	TICS
19/02/2025	2350/0850	**	JP	Trade
19/02/2025	2350/0850	*	JP	Machinery orders
19/02/2025	-		NZ	Reserve Bank of New Zealand Meeting
19/02/2025	0001/0001	*	GB	Brightmine pay deals for whole economy
19/02/2025	0030/1130	***	AU	Quarterly wage price index
19/02/2025	0100/1400	***	NZ	RBNZ official cash rate decision
19/02/2025	0700/0700	***	GB	Consumer inflation report
19/02/2025	0700/0700	***	GB	Producer Prices
19/02/2025	0900/1000	**	EU	EZ Current Account
19/02/2025	1000/1000	**	GB	Gilt Outright Auction Result
19/02/2025	1000/1100	*	EU	labour costs
19/02/2025	1200/0700	**	US	MBA Weekly Applications Index
19/02/2025	1330/0830	***	US	Housing Starts
19/02/2025	1355/0855	**	US	Redbook Retail Sales Index
19/02/2025	1800/1300	**	US	US Treasury Auction Result for 20 Year Bond
19/02/2025	1900/1400		US	FOMC Minutes
19/02/2025	2200/1700		US	Fed Vice Chair Philip Jefferson
20/02/2025	0030/1130	***	AU	Labor Force Survey
20/02/2025	0700/0800	**	DE	PPI
20/02/2025	1000/1100	**	EU	Construction Production
20/02/2025	1100/1100	**	GB	CBI Industrial Trends
20/02/2025	1330/0830	*	CA	Industrial Product and Raw Material Price Index
20/02/2025	1330/0830	***	US	Jobless Claims
20/02/2025	1330/0830	**	US	Philadelphia Fed Manufacturing Index
20/02/2025	1435/0935		US	Chicago Fed's Austan Goolsbee
20/02/2025	1500/1600	**	EU	Consumer Confidence Indicator (p)
20/02/2025	1530/1030	**	US	Natural Gas Stocks
20/02/2025	1600/1100	**	US	DOE Weekly Crude Oil Stocks
20/02/2025	1705/1205		US	St. Louis Fed's Alberto Musalem
20/02/2025	1800/1300	**	US	US Treasury Auction Result for TIPS 30 Year Bond
20/02/2025	1930/1430		US	Fed Governor Michael Barr
21/02/2025	2200/0900	***	AU	Judo Bank Flash Australia PMI
20/02/2025	2200/1700		US	Fed Governor Adriana Kugler
21/02/2025	2330/0830	***	JP	CPI
21/02/2025	0001/0001	**	GB	Gfk Monthly Consumer Confidence
21/02/2025	0030/0930	**	JP	Jibun Bank Flash Japan PMI
21/02/2025	0700/0700	***	GB	Public Sector Finances
21/02/2025	0700/0700	***	GB	Retail Sales
21/02/2025	0745/0845	**	FR	Manufacturing Sentiment
21/02/2025	0815/0915	**	FR	S&P Global Services PMI (p)
21/02/2025	0815/0915	**	FR	S&P Global Manufacturing PMI (p)
21/02/2025	0830/0930	**	DE	S&P Global Services PMI (p)
21/02/2025	0830/0930	**	DE	S&P Global Manufacturing PMI (p)
21/02/2025	0900/1000	***	IT	HICP (f)
21/02/2025	0900/1000	**	EU	S&P Global Services PMI (p)
21/02/2025	0900/1000	**	EU	S&P Global Manufacturing PMI (p)
21/02/2025	0900/1000	**	EU	S&P Global Composite PMI (p)
21/02/2025	0930/0930	***	GB	S&P Global Manufacturing PMI flash
21/02/2025	0930/0930	***	GB	S&P Global Services PMI flash
21/02/2025	0930/0930	***	GB	S&P Global Composite PMI flash
21/02/2025	1330/0830	**	CA	Retail Trade
21/02/2025	1330/0830	**	US	WASDE Weekly Import/Export
21/02/2025	1330/0830	**	CA	Retail Trade
21/02/2025	1430/1530		EU	ECB's Lane Speech at FIW-Research Conference
21/02/2025	1445/0945	***	US	S&P Global Manufacturing Index (Flash)
21/02/2025	1445/0945	***	US	S&P Global Services Index (flash)
21/02/2025	1500/1000	***	US	NAR existing home sales
21/02/2025	1500/1000	*	US	Services Revenues
21/02/2025	1500/1000	**	US	U. Mich. Survey of Consumers
21/02/2025	1630/1130		US	Fed Vice Chair Philip Jefferson