Next Week
March 6, 2009
The U.S. data calendar is lighter than the global calendar next week. Central bank interest rate policy meetings are scheduled in New Zealand, Brazil, Switzerland, Korea, and Chile. All are likely to cut rates, but the reductions in Switzerland and Korea will be no more than 25 basis from already low levels.
It will be a big week for trade data and thus a good opportunity to see the negative synergies of a highly globalized economy. Trade figures arrive in Canada, the United States, France, Germany, Japan, Euroland, Denmark, Britain and China.
The United States also releases retail sales, the monthly Federal budget, wholesale and business inventories, the U. Michigan preliminary consumer sentiment index and weekly jobless claims.
Japan is scheduled to release its index of leading ecoomic indicators, money and credit data, bankruptcies, the Economy Watchers index, machinery orders, corporate goods prices, capacity usage, consumer confidence and, most importantly, revised GDP which likely will show growth last quarter to have been down more than estimated at first.
Britain’s data list next week includes some house price measures, retail sales, industrial production, and the survey of price expectations.
Germany announces import prices, revised consumer prices, producer prices, industrial production, and industrial orders. France releases business sentiment, industrial production and consumer prices. Italian producer prices, GDP, and wages are scheduled, too. So are Belgian GDP, Dutch industrial output, and Spanish consumer prices.
From Euroland as a whole, we will get industrial production, retail sales, producer prices, and labor costs.
Canada announces housing starts, house prices, and its monthly labor market figures, which lately have paralleled the intensity of the U.S. labor market meltdown.
Australia also releases labor statistics. Their jobs figures have thus far been more resilient than expected. New Zealand reports house prices and retail sales.
Sweden releases industrial output and orders, as well as consumer prices and unemployment. Norway and Denmark announce price data. Besides a quarterly policy meeting at the Swiss National Bank, that economy’s unemployment and PPI figures are on next week’s calendar.
China tends to release all its monthly figures in a compressed period, and this is the week with the PPI, CPI, industrial production, retail sales, money, and the aforementioned trade numbers. India announces industrial production. Among Latin American data set for release, Mexican consumer prices and Brazilian GDP stick out.
It will not be an especially big week for central bank speaking engagements. Bernanke of the Fed, Barker of the Bank of England, and Weber of the Bundesbank and ECB give among the few.
Copyright 2009 Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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I’ve been searching for hard data on yuan/yen price relationships on the internet, but no joy. And I’m also looking for any research on how Chinese economic and monetary policies are affected the yen/usd relationship. Also, no joy. Seems all the smart guys either keep this to themselves, or want to charge a huge premium for it. Do you know of any sources available to the farting masses? I’ll be watching Chinese data this week, but the reporting of it is so fragmented that it is hard to put it into any sort of actionable package.
While I keep spreadsheets of data on major advanced economies, I confess that I do not have the same for developing economies like China or India.
Well, many of your questions go beyond the simple point that I was making in this post. In the late 1990’s, I acquired a reputation as a stock market doubter. There was simply no way I could justify a rate of appreciation in the DOW of 17% for 17 years from 777 in August 1982 to 11723 in January 2000. The wealth of this rise and of a spectacular increase in home equity values earlier this decade fueled consumption with purchasing power that had not been made the old fashioned way. The savings rate dropped below zero, and the U.S. made up the difference by importing the savings glut of many Asian and oil producing economies. But I digress. The point is that markets overshoot. Stock prices over-shoot and currency markets overshoot, up as well as down. This process has a benefit — it’s part of the market’s way of finding an appropriate price level — but the costs are heavy. I believe Greenspan was wrong to adopt a hands-off approach to asset bubbles. When an economic situation appears unsustainable, there are two thoughts to bear in mind. It it looks like a duck, it probably is a duck, and unsustainable imbalances tend to correct later than one anticipates.
So, is there any measurable way to know when markets overshoot? I suppose this question is rhetorical — only because if someone knew how to do this any overshoot would be almost immediately arbitraged down to a “rational” value…am I on the right track here?
Eniway, is there a good way to measure this for the broad market? (Good meaning not from a precise econometric measure, but from a risk/reward standpoint….)
Profits ought to grow long-term more or less consistently with nominal GDP as I said in the post. When Greenspan spoke about irrational exuberance, the DOW had already risen 15.9% per annum over the prior 14 years or so. What more quantitative proof of an asset bubble is needed? He was right to speak about that excess, and the world economy is paying awful price for his failure not to address it.