MNI Global Week Ahead - US CPI and Powell Testimony In Focus
Developed Markets
TUESDAY/WEDNESDAY - Fed Chair Powell Semi-annual Testimony
Fed Chair Powell is due to deliver testimony on the Semiannual Monetary Policy Report to the Congress on Feb 11-12, starting with the Senate Committee on Banking, Housing, and Urban Affairs on Tuesday (1000ET/1500GMT), and to the House Committee on Financial Services on Wednesday (also 1000ET/1500GMT). These don't always result in market-moving comments but often do, with the previous testimony in July for example seeing a dovish reaction to Powell's remark that "it doesn't seem likely" that the FOMC's next move would be a hike. The Fed is in data-dependent mode as it decides when and indeed if to cut rates further, so we will be looking for Powell's first reaction to the January employment report, which showed substantial historical revisions alongside a lower unemployment rate and greater wage pressures, and the January CPI report which is released shortly before his House session. Powell's also likely to receive questions on the future path of policy rates and how the FOMC will react to shifts in fiscal and trade policy, but with the occasion calling for an even more apolitical take than usual, he is likely to be evasive (as he said in January: "this is no different than any other set of policy changes at the beginning of an administration...we'll patiently watch and understand and kind of not be in a hurry to get to a place of understanding what our policy response should be until we see how it plays out.") He's likely to reiterate in some form that "we do not need to be in a hurry to adjust our policy stance", with policy "well-positioned" to address developments as they arise, though once again we will be interested in how he characterizes the current degree of policy restrictiveness (Powell in January: "not highly restrictive, but meaningfully restrictive").
WEDNESDAY - US January CPI
Wednesday sees the January CPI report with the added complication of the simultaneous release of seasonal factor revisions and new weights. This is a break from last year’s approach which saw new seasonal factors and seasonally adjusted data revised the Friday prior before the January release. As is always the case though, the revisions will cover the last five years of data, this time through 2020-24. Being purely a seasonal adjustment change, they will offset over the course of a year but it can alter latest monthly trends. There are no revisions to the underlying NSA data, i.e. published Y/Y changes will remain untouched. As for the new weights, these will have an impact on the new January data released on Wednesday but won’t alter historical values. Our bias is that weight changes should continue to be more modest than a few years ago when there were large swings in consumption patterns during and after the pandemic - these new 2025 weights will be based on consumer spending from 2023. These important caveats aside, consensus looks for core CPI at 0.3 % M/M after what is currently seen as 0.23% in December and four months averaging 0.30% M/M in a tight range. Whilst core PCE implications are ultimately what the Fed will care more about, we expect any changes from the three- and six-month core CPI run rates will help guide market reaction, at least initially. These rates were running at 3.3% and 3.2% annualized as of December having accelerated towards the 3.24% Y/Y, although that does compare to much more benign 2.2% and 2.3% annualized three- and six-month run rates for core PCE inflation in December.
THURSDAY - UK Q4 GDP
The first estimate of Q4 2024 GDP alongside monthly activity data for December will be published 0700GMT/0800CET on Thursday. Consensus expects monthly GDP to rise 0.1% M/M following a disappointing 0.1% in Nov and -0.1% in Oct. On a quarterly basis consensus expects GDP to fall -0.1%, in line with the BOE's latest projection. However, unless we see downward revisions to earlier months, the monthly and quarterly consensus numbers don’t add up. Assuming no revisions to November and October monthly data, we would need a December GDP print in the range of -0.23% and 0.07% M/M would leave Q4 GDP at -0.1% Q/Q. Note that, a monthly print between 0.07% and 0.37% would result in a flat Q/Q GDP print, while a print above 0.37% M/M would get a Q4 quarterly reading of 0.1% Q/Q or higher. Looking ahead, GDP growth is expected to remain sluggish, with the BOE projection for 2025 being downgraded to 0.75%.
FRIDAY - Eurozone Q4 GDP Second Estimate
The second estimate of Eurozone Q2 GDP is due on Friday and is expected to be unchanged at 0.0% Q/Q (below the ECB’s latest projection of 0.2%). This release will include an initial estimate of quarterly employment growth and - more importantly - real productivity per employee. The ECB projects employment growth at 0.1% Q/Q and productivity at 0.8% Y/Y. The December projections highlighted that annual productivity growth is still expected to recover in 2025/2026, but at a slower pace than assumed in September: "Productivity growth has been revised down to take into account structural factors which might limit the speed of the recovery in 2025 and 2026, such as the gradual reallocation of economic activity towards the services sector, transition costs towards the greening of the economy, a more lasting adverse impact of the energy price shock, a slower than expected adoption of highly innovative AI technologies, and demographic change."
Emerging Markets
THROUGH THE WEEK - China Data
Next week China reports the January PPI and CPI with both releases telling very different stories for the economy. PPI has been trapped in deflation with the last positive print in September 2022. The official PMI output price component showed modest improvement in December and this has fed into market expectations for a -2.1% decline, a slight improve from the -2.3% decline in December. The estimated improvement stems from improvement in oil and gas prices, yet still delivers the 28th consecutive month of decline. Market expectations for CPI see a modest increase for January to +0.4%, from +0.1% prior. Whilst the earlier than usual Lunar New Year holidays has created some negative distortions for other data releases. The holidays saw a strong demand led gains for pork and transport and are likely behind the expected rise in inflation. Inflation is forecast to rise in 2025 modestly, remaining stubbornly below PBOC targets. Lending and money supply data is also due to be released through the course of this week, with consensus expecting M1 growth at -0.5% Y/Y (vs -1.4% prior).
THURSDAY - BSP Decision (Philippines)
The Bangko Sentral ng Pilipinas (“BSP”) meets on February 13 on the back of a fairly soft period of economic data. CPI for January was in line with December at 2.9%, comfortably within the BSP’s +/-1% 3% target. December exports contracted -2.2%, imports -1.7%, whilst fourth quarter GDP missed expectations at +5.2%. With unemployment rates now moderating, and the currency one of the better performers of its regional peers, the window appears open for the BSP and we forecast a 25bp cut at the next meeting.
THURSDAY - BCRP Decision (Peru)
The BCRP will be encouraged by the latest set of inflation data in Peru, which showed annual headline CPI dip to 1.85%, keeping the door open to another 25bp rate cut in February. However, the explicit mention to the reference rate “approaching the level estimated as neutral”, a more hawkish Fed and prominent external risks relating to global trade may prompt a cautious hold at this juncture.
FRIDAY - CBR Decision (Russia)
The CBR will likely keep the policy rate on hold at 21% on Friday for a second consecutive meeting. The Bank’s analysts noted in a recent report that a return to low inflation requires tight monetary conditions for a long time, adding that they are yet to see any signs of a transition to a sustained slowdown in price growth.
| Date | GMT/Local | Impact | Country | Event |
| 09/02/2025 | 0130/0930 | *** |  CN | CPI |
| 09/02/2025 | 0130/0930 | *** | CN | Producer Price Index |
| 10/02/2025 | 0001/0001 | ** |  GB | KPMG/REC Jobs Report |
| 10/02/2025 | 0500/1400 |  JP | Economy Watcher's Survey | |
| 10/02/2025 | 0700/0800 | *** |  NO | CPI Norway |
| 10/02/2025 | - | *** | CN | Money Supply |
| 10/02/2025 | - | *** | CN | New Loans |
| 10/02/2025 | - | *** | CN | Social Financing |
| 10/02/2025 | 1400/1500 |  EU | ECB's Lagarde participates in plenary debate on ECB 2023 Report | |
| 10/02/2025 | 1530/1030 |  CA | BOC market participants survey | |
| 10/02/2025 | 1600/1100 | ** |  US | NY Fed Survey of Consumer Expectations |
| 10/02/2025 | 1630/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
| 10/02/2025 | 1630/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 11/02/2025 | 0001/0001 | * | GB | BRC-KPMG Shop Sales Monitor |
| 11/02/2025 | 0700/0800 | NO | GDP | |
| 11/02/2025 | 0845/0845 | GB | BOE's Mann lecture on Economic Prospects | |
| 11/02/2025 | 1100/0600 | ** | US | NFIB Small Business Optimism Index |
| 11/02/2025 | 1215/1215 | GB | BOE Bailey's speech on changes in financial markets | |
| 11/02/2025 | 1330/0830 | * | CA | Building Permits |
| 11/02/2025 | 1350/0850 | US | Cleveland Fed's Beth Hammack | |
| 11/02/2025 | 1355/0855 | ** | US | Redbook Retail Sales Index |
| 11/02/2025 | 1500/1000 | US | Fed Chair Jerome Powell | |
| 11/02/2025 | 1630/1130 | * | US | US Treasury Auction Result for Cash Management Bill |
| 11/02/2025 | 1700/1200 | *** | US | USDA Crop Estimates - WASDE |
| 11/02/2025 | 1700/1800 | EU | ECB's Schnabel in Nuremberg Talk Series' panel | |
| 11/02/2025 | 1800/1300 | *** | US | US Note 03 Year Treasury Auction Result |
| 11/02/2025 | 2030/1530 | US | New York Fed's John Williams | |
| 11/02/2025 | 2030/1530 | US | Fed Governor Michelle Bowman | |
| 12/02/2025 | 0030/1130 | ** |  AU | Lending Finance Details |
| 12/02/2025 | 0900/1000 | * |  IT | Industrial Production |
| 12/02/2025 | 1000/1000 | * | GB | Index Linked Gilt Outright Auction Result |
| 12/02/2025 | 1000/1100 | EU | ECB's Elderson in roundtable at the MNI Connect event | |
| 12/02/2025 | 1200/0700 | ** | US | MBA Weekly Applications Index |
| 12/02/2025 | 1330/0830 | *** | US | CPI |
| 12/02/2025 | 1330/0830 | ** | US | US CPI Annual Revised |
| 12/02/2025 | 1500/1000 | US | Fed Chair Jerome Powell | |
| 12/02/2025 | 1500/1500 | GB | BOE's Greene speech at Institute of Directors | |
| 12/02/2025 | 1530/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 12/02/2025 | 1700/1200 | US | Atlanta Fed's Raphael Bostic | |
| 12/02/2025 | 1800/1300 | ** | US | US Note 10 Year Treasury Auction Result |
| 12/02/2025 | 1830/1330 | CA | BOC Meeting Minutes | |
| 12/02/2025 | 1900/1400 | ** | US | Treasury Budget |
| 12/02/2025 | 2205/1705 | US | Fed Governor Christopher Waller | |
| 13/02/2025 | 0700/0700 | ** | GB | UK Monthly GDP |
| 13/02/2025 | 0700/0700 | ** | GB | Trade Balance |
| 13/02/2025 | 0700/0700 | ** | GB | Index of Services |
| 13/02/2025 | 0700/0700 | *** | GB | Index of Production |
| 13/02/2025 | 0700/0800 | *** |  DE | HICP (f) |
| 13/02/2025 | 0700/0700 | ** | GB | Output in the Construction Industry |
| 13/02/2025 | 0700/0700 | *** | GB | GDP First Estimate |
| 13/02/2025 | 0730/0830 | *** |  CH | CPI |
| 13/02/2025 | 0840/0940 | EU | ECB's Cipollone pre-recorded interview at Frankfurt Digital Finance conference | |
| 13/02/2025 | 1000/1100 | ** | EU | Industrial Production |
| 13/02/2025 | 1330/0830 | *** | US | Jobless Claims |
| 13/02/2025 | 1330/0830 | ** | US | WASDE Weekly Import/Export |
| 13/02/2025 | 1330/0830 | *** | US | PPI |
| 13/02/2025 | 1530/1030 | ** | US | Natural Gas Stocks |
| 13/02/2025 | 1800/1300 | *** | US | US Treasury Auction Result for 30 Year Bond |
| 14/02/2025 | 0800/0900 | *** |  ES | HICP (f) |
| 14/02/2025 | 1000/1100 | *** | EU | GDP (p) |
| 14/02/2025 | 1330/0830 | ** | CA | Monthly Survey of Manufacturing |
| 14/02/2025 | 1330/0830 | ** | CA | Wholesale Trade |
| 14/02/2025 | 1330/0830 | *** | US | Retail Sales |
| 14/02/2025 | 1330/0830 | ** | US | Import/Export Price Index |
| 14/02/2025 | 1415/0915 | *** | US | Industrial Production |
| 14/02/2025 | 1500/1000 | * | US | Business Inventories |
| 14/02/2025 | 1800/1300 | ** | US | Baker Hughes Rig Count Overview - Weekly |
