Macroeconomics: The Day Ahead – 1 February 2021

Written by Marc Ostwald, ADMISI’s Global Strategist & Chief Economist

  • Manufacturing PMIs dominate schedule; also digesting Korea Trade, German Retail Sales, Swedish GDP India Budget; awaiting UK Credit & Mortgage Lending, US Construction Spending and Brazil Trade; Fed speakers and modest run of corporate earnings
  • Manufacturing PMIs/ISM: China drop, mixed Asia and Europe, focus on US ISM, seen strong, focus on prices paid and orders
  • Week Ahead: busy week for data, but mostly statistical roadkill; RBA to hold, focus on potential taper; BoE also on hold, negative rates consultation and comments under the microscope; peak earnings week


A typically very busy first day of the month schedule of data awaits, with Manufacturing PMIs dominating the schedule, accompanied by the overnight Korea Trade, Australia’s Housing Finance & ANZ Job Ads and German Retail Sales on the to digest list. Ahead lie Swedish Q4 GDP, UK Credit and Mortgage Lending, US Construction Spending and Brazil Trade Balance. On the events front there are India’s FY2021/2022 Budget to consider along with speculation about Mario Draghi being proposed as PM for a new Italian govt, with some Fed speak on the state of the US labour market thrown in for good measure.

In terms of the Manufacturing PMIs, there will be disappointment at the drop in both the NBS and Caixin China PMIs, with the NBS Services PMIs taking a notable knock back from lockdown measures to contain some localized spikes in infection rates. Elsewhere the picture was anything but unitary, with a number of Asian Manufacturing PMIs seeing a further pick-up, but sharp differences in the overall pace of activity. The profile of European Manufacturing PMIs is anticipated to show that sector activity has held up well despite extended lockdowns, but the focus will above all be on the US Manufacturing ISM, that is seen dipping marginally to 60.0 from 60.5, with Prices Paid forecast to dip to a still very high 75.5 from 77.6, though perhaps the bigger question is whether New Orders dip from their post-GFC peak of 67.5 in December.

FWIW – Friday’s Le Fonti International interview on US and European economies and markets: Click here

RECAP – The Week Ahead – Preview:

A new month gets off to a familiar start in terms of the data schedule – PMIs, US/Canada labour data and German Orders, with further CPI and Q4 GDP reports in the Eurozone; there are RBA and BoE monetary policy meetings, plenty of Fed and ECB speakers, and it will be a peak week for US Q4 corporate earnings and also busy elsewhere. But pandemic related news, be that infection and mortality rates, vaccine roll-out progress and perhaps most importantly rising lockdown fatigue and resistance, which along with political news remain the bigger influences, along with the added bonus factor of examples of disorderly speculative markets (GameStop, etc.), borne on the wings of central bank financial repression, and exposing further faults in the post-GFC regulatory environment.  In the commodity space, earnings from energy majors BP, Exxon Mobil and Royal Dutch Shell and mining majors Vale and Glencore will be closely watched, with OPEC+’s JMMC meeting and the annual South African Indaba Mining conference also in view. Last but not least as China heads into its final full trading week ahead of the Lunar New Year holiday period, will the PBOC relent on its squeeze on speculative and leveraged positions in its markets and start to inject liquidity ahead of the holiday period, as it would normally do.

The unseemly row over the EU vaccine roll-out leaves the European Commission exposed on multiple fronts, with its judgements and its planning obviously flawed and found wanting. However there is one question which no one seems to be asking: the planning for vaccine production and distribution at government and corporate level worldwide should have aimed for the maximum capacity to inoculate ALL of the world’s population as quickly as possible, once vaccines were/are approved for deployment. This should have long pre-dated actual approval processes, particularly given the extensive pre-orders by governments and indeed large govt subsidies to create production capacity, why are pharmaceutical companies now having to suspend production to expand capacity? Perhaps I am being naive and exposing my ignorance, but this appear to be very material, above all given markets’ blind faith in a vaccination led economic recovery.

The week’s economic data schedule again looks to be nothing more than statistical roadkill, with Manufacturing PMIs holding up well (above all in the USA) and Services PMIs mostly contracting but still not as bad as in Q2 2020, but raising concerns that the second wave of the virus is taking more of a toll than had been hoped initially. If forecasts are correct then markets may take heart from US Initial and Continued Claims, seen falling to 830K and 4.50 Mln, and ignore the anticipated rebound from -140K to a still very week 50K in Non-Farm Payrolls. German Factory Orders are forecast to fall 1.3% m/m, the first setback since April’s -25.9%, and broadly in line with indications from surveys, but again a reminder that the recovery momentum in Europe, even in Manufacturing, has lost traction, and lags North America and Asia.

On the central bank front, Australia’s RBA is not expected to change its key rate or yield target, but there is some speculation that it might opt to taper its six month A$100 Bln QE programme (due to end at the end of April) given that the economy is showing some robust recovery momentum, and the housing market is ‘running hot’. By contrast the Bank of England is expected to keep Base Rate and its QE programme unchanged, but the focus will be on its ongoing review of the feasibility of deploying negative interest rates, with the publication of responses to its consultation process on negative rates due to be published. The message on negative rates will likely remain the same, they remain a policy option, but there is no immediate prospect of actual deployment, and given the most recent BoE comments on the topic, markets are not discounting any move to negative rates.

To view the full report and to sign up for daily market commentary please email

The information within this publication has been compiled for general purposes only. Although every attempt has been made to ensure the accuracy of the information, ADM Investor Services International Limited (ADMISI) assumes no responsibility for any errors or omissions and will not update it. The views in this publication reflect solely those of the authors and not necessarily those of ADMISI or its affiliated institutions. This publication and information herein should not be considered investment advice nor an offer to sell or an invitation to invest in any products mentioned by ADMISI.

© 2021 ADM Investor Services International Limited.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2024 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.