Markets are grappling with uncertainty as the US economy shows signs of deceleration, even as the labor market remains steady. At the same time, predictions regarding the US Fed’s monetary policy and headlines involving Trump continue to stir market volatility. Last week was no exception.
In the upcoming week, 10.02.2025 – 16.02.2025, market participants will focus on the release of key macroeconomic statistics from the US, New Zealand, Germany, the UK, Switzerland, and the Eurozone. The main highlight of the coming week is the US CPIs publication.
Note: During the coming week, new events may be added to the calendar, and/or some scheduled events may be canceled. GMT time
The article covers the following subjects:
Major Takeaways
- Monday: no important macro statistics is scheduled.
- Tuesday: no important macro statistics is scheduled.
- Wednesday: US CPIs
- Thursday: UK GDP, US PPIs
- Friday: eurozone GDP
- The key event of the week: US CPIs
Monday, February 10
There are no important macro statistics scheduled to be released.
Tuesday, February 11
There are no important macro statistics scheduled to be released.
Wednesday, February 12
13:30 – USD: Consumer Price Indexes
The Consumer Price Index (CPI) measures the change in prices of a selected basket of goods and services over a given period and is a key indicator for assessing inflation and changes in consumer preferences. Food and energy are excluded from the Core CPI to provide a more accurate assessment.
A high index reading strengthens the US dollar because the probability of a Fed interest rate hike increases, while a low reading weakens the currency.
Previous values YoY:
- CPI: +2.9%, +2.7%, +2.6%, +2.4%, +2,5%, +2.9%, +3.0%, +3.3%, +3.4%, +3.5%, +3.2%, +3.1%, +3.4%, +3.1% +3.2%, +3.7%, +3.7%, +3.2%, +3.0%, +4.0%, +4.9%, +5.0%, +6.0%, +6.4% in January 2023;
- Core CPI: +3.2%, +3.3%, +3.3%, +3.3%, +3.2%, +3.2%, +3.3%, +3.4%, +3.6%, +3.8%, +3.8%, +3.9%, +3.9%, +4.0%, +4.0%, +4.1%, +4.3%, +4.7%, +4.8%, +5.3%, +5.5%, +5.6%, +5.5%, +5.6% in January 2023.
The data shows that consumer inflation is not declining. Previous figures also suggested a slower pace than anticipated by the US Fed. It remains well below the 2022 figures when US annual inflation hit a 40-year high of 9.1% in June. Inflation in the US is still well above the Fed’s 2% target, which will force US central bankers to keep interest rates high and, in the event of a possible rate cut, then pause for a long time to assess the situation in the country’s economy and labor market.
If the figures are confirmed or prove to be lower than expected, the US dollar will likely decline in value in the short term. Readings higher than estimated will strengthen the currency, as it will increase the probability of the Fed keeping the interest rate at high levels for longer.
Thursday, February 13
02:00 – NZD: Inflation Expectations of the Reserve Bank of New Zealand for Q1
The indicator measures consumers’ expectations regarding annual inflation over the next 24 months. An increase in these expectations can significantly influence the likelihood of an interest rate hike. A high indicator value is a positive factor for the New Zealand dollar.
Previous values QoQ: +2.12% in Q4 2024, +2.03%, +2.33%, +2.50% in Q1 2024, +2.76%, +2.83%, +2.79%, +3.3%, +3.62% in Q4 2022.
07:00 – GBP: UK GDP for Q4 2024 (Preliminary Estimate)
GDP is viewed as an indicator of the UK economy’s condition. The growing GDP indicator is considered positive for the British pound. The UK GDP rate was one of the highest in the world until 2016, when the Brexit referendum occurred. Subsequently, its growth decelerated, and with the onset of the COVID-19 pandemic, the UK GDP rate dropped.
Previous GDP values: 0.0% in Q3, +0.5% in Q2, +0.7% in Q1 2024, -0.3% in Q4, -0.1% in Q3, 0% in Q2, +0.2% in Q1 2023, +0.1% in Q4 2022, -0.1% in Q3, +0.1% in Q2, +0.5% in Q1 2022, +1.5% in Q4 2022.
The key factors that may force the Bank of England to keep the rate low include weak GDP, slow labor market growth, and low consumer spending. Should the GDP data fall significantly below previous values, the pound will face downward pressure. Conversely, high GDP readings will bolster the currency.
07:30 – CHF: Consumer Price Index
The Consumer Price Index (CPI) reflects the retail price trends for a group of goods and services comprising the consumer basket. The CPI is a key gauge of inflation. Additionally, the index has a significant impact on the value of the Swiss franc.
In December, consumer inflation gained +0.6% YoY but declined -0.1% MoM after -0.1% (+0.7% YoY) in November, -0.1% (+0.6% YoY) in October, -0.3% (+0.8% YoY) in September, 0% (+1.1% YoY) in August, -0.2% (+1.3% YoY) in July, 0% (+1.3% YoY) in June, +0.3% (+1.4% YoY) in May, +0.3% (+1.4% YoY) in April, 0% (+1.2% YoY) in February, +0.2% (+1.3% YoY) January 2024, +1.7% in December 2023, +1.4% in November, and +1.7% YoY in October.
An index reading below the forecasted or previous value may weaken the Swiss franc, as low inflation will force the Swiss Central Bank to ease its monetary policy. Conversely, a high reading would be positive for the Swiss franc.
13:30 – USD: Producer Price Index (PPI)
The Producer Price Index (PPI) measures the average change in wholesale prices determined by manufacturers at all stages of production. The index is one of the leading inflation indicators in the United States, estimating the average change in wholesale producer prices.
Rising production costs increase wholesale selling prices, which ultimately boosts inflation. In normal economic conditions, growing inflation usually puts upward pressure on the national currency quotes, implying a tighter central bank monetary policy.
Previous values: +0.2% (+3.3% YoY) in December, +0.4% (+3.0% YoY) in November, +0.2% (+2.4% YoY) in October, 0% (+1.8% YoY) in September, +0.2% (+1.7% YoY) in August, +0.1% (+2.2% YoY) in July, +0.2% (+2.6% YoY) in June, -0.2% (+2.2% YoY) in May, +0.5% (+2.2% YoY) in April, +0.2% (+1,6% YoY) in March, +0.6% (+1.6% YoY) in February, +0.3% (+0.9% YoY) in January 2024, 0% (+0.9% YoY) in December 2023, -0.5% (+1.3% YoY), +0.5% (+2.2% YoY), +0.7% (+1.6% YoY), +0.3% (+0.8% YoY), +0.1% (+0.2% YoY), -0.3% (+0,9% YoY), +0.2% (+2.3% YoY), -0.5% (+2.7% YoY), -0.1% (+4.9% YoY), +0.7% (+5.7% YoY) in January 2023.
If the data exceeds the forecasted value, the US dollar will likely strengthen. Conversely, if the data falls below forecasted and previous values, this will exert pressure on the Fed. This could lead to the Fed’s monetary policy easing, which will negatively impact the US dollar.
Friday, February 14
10:00 – EUR: Eurozone GDP for Q4 (Secong Estimate)
GDP is considered to be an indicator of the overall economic health. A rising trend of the GDP indicator is positive for the euro, while a low reading weakens the currency.
Recent eurozone macro data has shown a gradual recovery in the growth rate of the European economy after a sharp decline in early 2020.
Previous values: +0.4% (+0.9% YoY) in Q3, +0.2% (+0.6% YoY) in Q2, +0.3% (+0.4% YoY) in Q1 2024, 0% (+0.1% YoY) in Q4 2023, -0.1% (0% YoY) in Q3, +0.1% (+0.5% YoY) in Q2, -0.1% (+1.0% YoY) in Q1 2023, 0% (+1.9% YoY) in Q4 2022, +0.7% (+4,0% YoY) in Q3, +0.8% (+4.1% YoY) in Q4 2022, +0.7% (+4,6% YoY) in Q3, +2.2% (+3.9% YoY) in Q3, +2.2% (+14.3% YoY) in Q2, and -0.3% (-1.3% YoY) in Q1 2021.
If the data is below the forecasted and/or previous values, the euro may decline. Conversely, readings exceeding the predicted values may strengthen the euro in the short term. However, the European economy is still far from fully recovering even to pre-crisis levels.
13:30 – USD: Retail Sales. Retail Sales Control Group
This Census Bureau report on retail sales reflects the total sales of US retailers of all sizes and types. The change in retail sales is a key indicator of consumer spending. The report is a leading indicator, and the data may be subject to significant revisions in the future. High indicator readings strengthen the US dollar, while low readings weaken it. A relative decline in the indicator may have a short-term negative impact on the US dollar, while a rise in the indicator will positively impact the currency. In December, the value of the indicator stood at +0.4%( after +0.7%, +0.4% in October and September, +0.1% in August, +1.1% in July, -0.2% in June, +0.2% in May, -0.2% in April, +0.5% in March, +0.7% in February, -1.1% in January 2024).
Retail sales are the main indicator of consumer spending in the United States, showing the change in the retail industry.
Retail sales serve as an indicator of domestic consumption, contributing the most to the US GDP and being one of the main factors of inflation risks increase or decrease. Deterioration of the indicator values is a negative factor for the US dollar. Inflation deceleration may prompt the Fed to begin the process of monetary policy easing.
The Retail Control Group indicator gauges volume in the retail industry and is used to calculate price indexes for most goods. High readings strengthen the US dollar, while low results weaken the currency. A slight increase in the figures is unlikely to boost the dollar. If the data is lower than the previous readings, the dollar may be negatively impacted in the short term. Previous values: +0.7%, +0.4%, -0.1%, +0.7%, +0.3%, +0.4%, +0.9%, +0.4%, -0.3%, +0.9%, 0%, -0.4% in January 2024, +0.6%, +0.2%, +0.2%, +0.2%, +0.2%, +0.7%, +0.3%, +0.4%, +1.0%, -1.2%, -0.1%, +2.6% in January 2023.
15:00 – USD: University of Michigan Consumer Sentiment Index (Preliminary Release)
This indicator reflects American consumers’ confidence in the country’s economic development. A high reading indicates economic growth, while a low one points to stagnation. Previous indicator values: 71.1 in January, 74.0 in December, 71.8 in November, 70.5 in October, 70.1 in September, 67.9 in August, 66.4 in July, 68.2 in June, 69.1 in May, 77.2 in April, 79.4 in March, 76.9 in February, 79.0 in January 2024, 69.7 in December 2023, 61.3 in November, 63.8 in October, 68.1 in September, 69.5 in August, 71.6 in July, 64.4 in June, 59.2 in May, 63,5 in April, 62.0 in March, 67.0 in February, 64.9 in January 2023, 59.7 in December, 56.8 in November, 59.9 in October, 58.6 in September, 58.2 in August, 51.5 in July, 50.0 in June, 58.4 in May, 65.2 in April, 59.4 in March, 62.8 in February, 67.2 in January 2022. An increase in the indicator will strengthen the US dollar, while a decrease will weaken the currency. The data shows that the recovery of this indicator is uneven, which is unfavorable for the greenback. A decline below previous values will likely negatively impact the US dollar in the near term.
Price chart of EURUSD in real time mode
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