Economic Data on the Week of February 12: Inflation, Earnings & More

The week of February 12 bears significant events for market watchers and participants as key economic indicators and reports are set to be released.

This week’s reports can provide valuable insight into the state of the global economy as we delve deeper into 2024. Here’s what you can expect:

US CPI & Inflation: How Is the World’s Biggest Economy Faring?

US Consumer Price Index (CPI), which is one of the Fed’s most referred to inflation and deflation gauges, is set to be released this week on Tuesday, February 13.

The report will reflect January’s inflation levels and Wall Street economists predict a 2.9% yearly gain in headline CPI. If this prediction materializes, it would mark a 3.4% decrease from December’s headline CPI of 3.4%. Meanwhile, core CPI (which excludes food and energy) is expected to show a 3.7% YoY rise which would also mark a slowdown from December’s 3.9% increase. On the other hand, the monthly core CPI is expected to remain unchanged (0.3%) from December.

According to some Morgan Stanley analysts like Diego Anzoategui, the bank expects “more core goods deflation this month, mainly driven by weak used car prices.” However, he also mentioned that “services inflation remains sticky.”

Other economists like Bank of America’s Michael Gapen note that “the consumer looks healthy, with upside risks to spending from accelerating real wages.” (Source: Yahoo Finance)

How Might The Report Affect the Federal Reserve?

Furthermore, it's essential for both consumers and traders to note that while the Fed appears to be taking a cautious stance toward potential rate cuts, numerous reports indicate that inflation is edging closer to the Fed's 2% target. This development could potentially elevate the likelihood of rate cuts occurring within the year.

Additionally, many traders seem to be hopeful as they predict rater cuts in May.

However, only time will tell what the report will actually look like and how it might affect the Federal Reserve in its upcoming FOMC meeting on March 19-20 and to see how and if this will lead to the Fed’s anticipated rate cuts in 2024.

UK Data Releases: GDP, CPI, Retail & Employment 

The UK’s economy faces a pivotal week as a plethora of economic releases is set to take place. 

On Tuesday, February 13th, UK employment is scheduled to be reported during an uncertain time for the UK’s economy, especially as job data has been deemed unreliable by the statistics watchdog. According to Rob Kent-Smith, the head of the Office for Statistics Regulation, there’s “a way to go” before official job figures are considered reliable again. 

Moreover, UK CPI and PPI are set to be released on Wednesday, February 14th, while GDP figures for Q4 2023 will be reported on Thursday, February 15th. 

The results could provide a clearer picture of the possible monetary trajectory of the Bank of England (BoE) in their upcoming meeting on March 21st. 

The Bank of England's Monetary Policy Committee (MPC) is experiencing notable divergence in opinions between its hawkish and dovish members. 

Accordingly, the forthcoming data releases are expected to intensify the debate within the MPC and provide ammunition to both sides of the policy divide, potentially influencing future monetary policy decisions.

This Week’s Main Earnings Reports

• Tuesday, February 13: Airbnb (ABNB), Coca-Cola (KO),Lyft (LYFT), and Shopify (SHOP).

• Wednesday, February 14: Sony (SONY), Cisco (CSCO), Albermarle (ALB), and Kraft Heinz (KHC).

• Thursday, February 15: DoorDash (DASH), Stellantis (STLA), and Wendy's (WEN).

It will be interesting to see what these earnings will reveal about various market sectors.

Conclusion 

This week holds key economic reports, notably the US CPI indicating a potential slowdown in inflation and the UK's data releases on GDP, CPI, and employment, shaping monetary policy discussions. Additionally, earnings reports from companies like Airbnb and Sony will offer insights into market trends. It's a crucial period for understanding economic dynamics and market directions.