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


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

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