Key Events And Issues In The Coming Week

Tyler Durden's picture

The most notable event in this traditionally quiet post-payrolls week is Janet Yellen's Humphrey Hawkins testimony before Congress set for mid-week. In terms of economic data releases, the US retail sales (Exp. 0.05%) is on Thursday and consumer sentiment survey is on Friday (consensus 80.5). We also have IP numbers from Euro Area countries and the US. Most recent external account statistics are released from Japan, China, India and Turkey. It is also interesting to track CPI data in Germany, Spain and India, given the ECB and RBI currently face diverging inflation challenges and may be forced into further action. Finally, we have Q4 GDP data from the Euro Area economies (Friday).

Monday, 10 February

  • Israel MPC minutes
  • France IP (Dec): consensus +1.0%yoy, previous +1.5%yoy
  • Italy IP (Dec): previous +1.4%yoy
  • Also interesting: Japan Consumer Confidence (Jan), Canada Housing Starts (Jan), Taiwan Trade Balance (Jan), Romania Trade Balance (Dec)

Tuesday, 11 February

  • US Fed speakers: Yellen (FOMC voter) presents (semi-annual) monetary policy report to House Financial Services Committee
  • Japan Tertiary Industry Index (Dec): consensus -0.2%mom, previous +0.6%mom
  • Japan Machinery Orders (Dec): consensus -4.0%mom, previous +9.3%mom
  • Also interesting: US Wholesale Trade (Dec), Israel Trade Balance (Jan), Philippines Trade Balance (Dec)

Wednesday, 12 February

  • UK BoE Inflation Report. We expect the MPC to replace its existing forward guidance framework with one based on a broader range of variables, perhaps with a greater emphasis on wage developments.
  • US Fed speakers: Bullard (FOMC non-voter), Lacker (FOMC non-voter)
  • US Federal Budget Balance (Jan): consensus USD-28.5bn, previous USD+53.2bn
  • Euro Area ECB speakers: Draghi, Praet
  • Euro Area IP (Dec): consensus +1.6%yoy, previous +3.0%yoy
  • China Trade Balance (Jan): consensus USD+22.35bn, previous USD+25.6bn
  • India CPI (Jan): consensus +9.5%yoy, previous +9.9%yoy
  • Also interesting: Japan Corporate Goods PI (Jan), Switzerland CPI (Jan), India IP (Dec), Czech Republic CA Balance (Dec), Poland CA Balance (Dec)

Thursday, 13 February

  • US Fed speakers: Yellen (FOMC voter) presents monetary policy report to Senate Banking Committee
  • Sweden MPC: consensus has policy (repo) rate unchanged at 0.75%
  • Indonesia MPC: consensus has policy rate unchanged
  • South Korea MPC: consensus has policy rate unchanged at 2.50%
  • Peru MPC: GS has policy rate unchanged at 4.00%
  • US Retail Sales (Jan): consensus +0.0%mom, previous +0.2%
  • US Business Inventories (Dec): consensus +0.4%, previous +0.4%
  • US Initial Jobless Claims: consensus 330K, previous 331K
  • Germany Harmonized CPI (Jan, final): GS +1.2%yoy, consensus +1.2%yoy, previous +1.2%yoy (flash)
  • Turkey CA Balance (Dec): consensus USD-7.60bn, previous USD-3.94bn
  • Also interesting: UK RICS Housing Market Survey (Jan), Canada New Housing Price Index mom (Dec), Argentina CPI (Jan)

Friday, 14 February

  • Russia MPC: Consensus has policy rate unchanged at 5.50%. The CBR is expected to shift toward a more hawkish bias, emphasizing risks to inflation expectations from the recent Ruble depreciation and the need for tighter monetary policy in order to meet medium-term inflation targets.
  • Mexico MPC minutes (Jan)
  • Colombia MPC minutes (Jan)
  • US U. of Michigan Consumer Sentiment (Feb, prov.): consensus 80.5, previous 81.2
  • US Industrial Production (Jan): consensus +0.2%, previous +0.3%
  • US Capacity Utilization (Jan): consensus 79.3%, previous 79.2%
  • Euro Area GDPs (Q4): previous +0.1%qoq
  • China CPI (Jan): consensus +2.4%yoy, previous +2.5%yoy
  • China PPI (Jan): consensus -1.6%yoy, previous -1.4%yoy
  • Spain Harmonized CPI (Jan, final): previous +0.3%yoy (flash)

In table format:


Finally, the key issues and concerns for the coming week:


At 6.6% in January, the US unemployment rate is now close to the 6.5% the Federal Reserve initially set out in its forward guidance. The Fed already softened this guidance in December, noting that “it likely will be appropriate to maintain the current target range for the federal funds rate well past the time that the unemployment rate declines below 6-1/2 percent, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal”.

When Chairman Yellen testifies before both House and Senate committees this week, markets will be watching closely for clues as to how the Fed could further reformulate its guidance. Last week, Boston Fed President Rosengren suggested placing emphasis on the broader measures of unemployment. Richmond President Lacker, for his part, hinted that greater emphasis on the Fed?s own summary of economic projections could be an option. The FOMC next meet on 18-19 March.


The framework was only launched last year alongside the August Inflation Report. The original predictions of the unemployment rate contained in that report forecast that the 7% threshold would not be reached over the three year forecast horizon. It falls to 7.1% by Q3 2015 and then stays at that level for the next year. In the  revised November forecasts, the rate falls to 7% by Q4 2014 and then continues falling to 6.6% by Q4 2016. Moreover, since November the rate has fallen to 7.1% and we expect the 7% figure to be reached within the next few months.

This confronts the MPC with the urgent task of updating its forward guidance. Although the MPC was careful to emphasise from the outset that the threshold was  only a staging post at which to reassess the state of the economy, rather than a trigger point for rate increases, the market ignores such nuances. The market  concludes that the first rate increase cannot be long delayed. We disagree with that view because it misunderstands the nature of forward guidance. The unemployment rate forecast in conjunction with the threshold is simply a signalling device to tell the markets, and at least as important the public, that it has no intention of raising rates until it is sure the state of the economy warrants it, i.e. not yet.

So the framework needs to be updated and Carney told us in his Davos comments that this update would ?begin? in the Inflation Report. We see the main options as being:

1. Most likely! Drill down into the labour market to specify a broad range of labour indicators to monitor ? this could be sold as an extension or development of the current approach.

2. Lower the threshold ? unlikely as the unemployment rate keeps catching out the MPC and Weale is opposed to the idea.

3. Publish MPC members’ individual forecasts of the date of the first rate increase ? this is attractive but the Court of the Bank of England is opposed to individual forecasts.

4. Publish a median forecast of members’ rate forecasts or a rate path ? runs contrary to the analysis in the original guidance document.

5. Mervyn King forward guidance ? i.e. go back to the pre-Carney approach. This is unlikely to be acceptable as it would acknowledge that introducing forward guidance was a mistake.

We see option (4) as most likely.


We expect France to be the strongest link on GDP growth clocking in at 0.4% qoq in Q4 and proving that PMI indicators must be taken with a pinch of salt when it comes to forecasting output. Germany is expected to post a gain of 0.2%, the same number as the euro area aggregate. Overall, this is still a story of a very weak recovery as highlighted by ECB President Draghi.


In line with consensus, we expect the Bank of Korea to keep rate unchanged at 2.5% this Thursday. Recent economic data have been somewhat better than feared. Combine this with recent turmoil in EM markets and the arguments stack up against a move this week. Low inflation will nonetheless keep hopes of future rate cuts alive with the January headline at just 1.1% (core 1.7%). Our view remains for rates to stay on hold in 2014.


Although the domestic economy warrants a rate cut, currency weakness, the recent tumult in EM and fears of inflation pass-through will keep the CBR on hold this week. The 14 February will nonetheless offer a press conference which should offer some interest. We expect the CBR to remain on hold during the first half of 2014
and only see scope for a cut during the second half of the year.

Source: Goldman, BofA, Socgen

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Headbanger's picture

The key event this week is the massive market implosion!

Sudden Debt's picture



First gold and silver need to explode.

Than I'll sell my options, go short the indexes and than I may crash.



BandGap's picture

I really think something is brewing today. All my mining stocks are looking hot.

Mister Kitty's picture

Janet will have to keep the printing press running.  She has no othe choice.  That's good news for gold investors.

X_mloclaM's picture

what's good news for gold investors is when the rest of the states accept it in payment of tax, and courts recognize it as denominating contracts

as for the Fed, yes, >55b/mo is 'running'

ArkansasAngie's picture

There ae no key events this week.  Or next for that matter

The script has been written.  The actors know their lines.

And ... since the play is national security and thus top top secret we will never know if they miss a line or skip a beat.

This country is going in the wrong direction.

Sardonicus's picture

Does anyone know if I open a MyRA, that I might be able to invest it in iPhones with Flappybird on them?

Is there a flappy bird etf?

What are the flappybird futures doing?

gawd people are stupid.

BandGap's picture

Wait, there will be more.

GetZeeGold's picture



Word is the the Post Office is militarizing before the onslaught.....which means I won't be able to find any .22LR this week as well.

BandGap's picture

I have some to spare. Tin instead of lead. Interesting shit.

Oldwood's picture

I wonder if it made any difference which end of the Titanic you were standing on when it went under? Everyone is scurrying from one side or end to the other trying to keep their feet dry, but I have a feeling a lot will come down to luck. It seems that sometimes those who try to be the best prepared are the first to go. I, unfornuately have been reading this shit for far too long to be able to ignore it now, so I will continue on screaming to the top of my lungs "the sky is falling, the sky is falling". I KNOW that someday I will be right, just as I know someday I will be dead, I just don't know when. Until then I will have to be content to be nuttier than a fruit cake to most people I know.

BandGap's picture

There were discussions on these boards years ago about how things would look when they unraveled. You are heading in the direction of the consensus at the time. People will look for the highest ground until there isn't any.

buzzsaw99's picture

:Old Yeller has contracted hydrophobia and must be put down. Pee-lousy brings out the gun:

Dimon: No, Nancy!

Klown KONgreff: There's no hope for her now, Jamie. She's suffering. You know we've got to do it.

Sufiy's picture

Gold breakout above $1270 - at $1278 now. The Mother of short squeeze has arrived:

Toby Connor: The Great Inflation Of 2014 - Gold And Silver To Rise 

Toby Connor provides very interesting technical view on the general markets, Commodities, Gold and Silver. Nobody can find inflation these days and his take on the final rise and bust in the general markets is very intriguing. Our own observations confirm the CRB - Commodities Index breakout and that Gold is knocking on the $1270 with huge break out to the upside after that. Supply and Demand picture provides further support to the technical observations in Gold and Silver markets these days. Where the Gold will come from in the future with China record buying continued? M&A activity will be driving the next Bull market in Gold and Silver miners.

valley chick's picture

The only event this week is ....wait for it...THE WEATHER    sarc

401K of Dooom's picture

Hey tyler, due to current conditions all you need to say concerning economic predictions is this:  MSM says the economy looks great, FSA says gimmie more stuff and the druggies demand more dope!  Cue the "It's a wonderful world song" now.

Sardonicus's picture

Your article headline has a typo.

It should read:

Key Events And Issues In The Coming Weak