Macroeconomics: The Day Ahead – 9 February 2021

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

  • Busier day for data, though may get little traction; digesting UK Retail & Consumer Spending surveys, Japan Wages & German Trade; awaiting US  NFIB survey, JOLTS Job Openings and Mexico & Brazil consumer prices;  smattering of central bank speak, plenty of corporate earnings & UK, German & US bond auctions; Agri commodities zeroing in on WASDE monthly

  • US NFIB: modest rebound seen; employment indicator bounce and other surveys suggest some upside risks

  • Reflation trade inconsistent, liquidity locusts very consistent

EVENTS PREVIEW

Today’s data run is unlikely to ruffle any market feathers for more than a passing moment, nor are the few central bank speakers. By contrast the USDA’s WASDE report will almost create some waves in grains and beans markets, and there are plenty of corporate earnings reports, amongst which Honda, and Nissan feature in the Auto sector, while others likely to be amongst the headlines are: America Movil, Cisco, DuPont, Fidelity, Tenet Healthcare and Twitter. Statistically, there are Japan’s Labour Cash Earnings, German Trade, UK BRC Retail Sales and France’s BoF Industry Sentiment to digest, while ahead lie US NFIB Small Business Optimism and JOLTs Job Openings along with consumer prices in Brazil and Mexico. Govt bond sales see the UK sell 20-yr, Germany 12-yr and US 3-yr, as markets continue to push curves steeper, though with little reaction either in credit (see attached USD credit spread charts) or equities. Indeed as much as there would appear to be a reflation trade in progress, the profile is rather disintermediated, for example compare copper prices with oil, and this points rather to continued waves of speculative central bank facilitated liquidity swarming like locusts over sectors or individual equities, credits or commodities.

 

 In terms of the overnight data, the BRC total Retail Sales fall and Barclaycard Consumer Spending slide underline the headwinds for the UK economy in Q1 due to the combined impact of extended lockdown measures and Brexit related disruptions. As with much of Europe, it confirms that the hoped for recovery in 2021 will take a lot longer to materialize. Germany’s Trade data were slightly better than expected, with exports and imports essentially unchanged vs. November, but given the inherent volatility of the series, this was anything but significant.

 

U.S.A. – Jan NFIB Small Business Optimism

After a sharp fall from 101.4 to 95.9 in December, a move that was very broad based (9 out of 10 sub-indices), a modest rebound to 96.8 is expected. The already published Employment indices saw no recovery in hiring plans (17), however Compensation plans rebounded and Positions Note Able To Fill also picked up, and with other surveys (ISMs, etc) also picking up or proving resilient, the risks look to be for a stronger than expected rebound

To view the full report and to sign up for daily market commentary please email admisi@admisi.com

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.