Next Week

February 27, 2009

The coming week will see the release of manufacturing and non-manufacturing purchasing manager indices in a variety of countries, several interest rate meetings, Japan’s quarterly Finance Ministry corporate suvey and the monthly U.S. labor report.

Aside from factory PMI’s on Monday and service PMI’s on Wednesday, scheduled euro area releases include producer prices in Germany, France and the Bloc as a whole.  Germany and Euroland will announce monthly retail sales.  Revised Euroland GDP is due, too.  The German figures were not modified, so I do not anticipate a big change as occurred in the U.S. figures.  French unemployment, Dutch consumer prices and the Italian CPI also arrive.

Britain will release PMI’s for manufacturing, services and construction, the Hometrack house price index, producer prices, shop prices, and the Nationwide measure of consumer confidence.  Swiss consumer prices and GDP growth are on the week’s calendar as well.

Canada and Australia each report fourth-quarter GDP, building permits, and a PMI index. Australia also announces its current account and trade balance.

Japan has a thin slate — just the monetary base, vehicle sales, and the aforementioned survey of corporate investment, sales and profits, a report that often leads analysts to adjust expectations about revised GDP. South Korean trade figures will be closely watched.  Asia’s excessive dependency on trade has been exposed in this recession.  China releases its PMI.

U.S. February labor statistics on Friday share the week’s main spotlight with the ECB and Bank of England interest rate meetings. Other U.S. releases will be the purchasing managers surveys, pending home sales, construction spending, motor vehicle sales, productivity, unit labor costs, factory orders, consumer credit, ADP private employment, jobless claims, and the Fed’s Beige Book, which is a rundown of regional economic trends prepared in advance of each FOMC meeting.  Both Geithner and Bernanke will testify during the week on the budget.

The ECB and Bank of England are expected to cut their key rates by 50 basis points each on Thursday to 0.5% and 1.5%, respectively.  The consensus forecasts for Tuesday policy meetings at the Reserve Bank of Australia and the Bank of Canada call for no change and down 25 basis points, respectively.  I would not be surprised to see each of those meetings could end up with rates 25 basis points lower than those mainstream views. In Asia, the Central Bank of The Philippines and Bank Indonesia have interest rate meetings, too, and both are likely to end with rate cuts of 50 basis points.

As weeks generally go, next week has atypically few scheduled speeches by central bankers.  And aside from U.S. labor figures, the PMI’s, European retail sales, and selected GDP reports, most of the scheduled data are second-tier releases.

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.


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