US: key numbers next week include CPI and retail sales - Danske Bank

Analysts from Danske Bank, expect the CPI to show a reading of 0.2% m/m on Tuesday. Data to be released next week also include retail sales and Industrial Production. 

Key Quotes: 

“In the US, CPI core inflation numbers are due to be released on Tuesday. We expect the numbers from February to come in at 0.2% m/m (1.8% y/y, down from 1.9% y/y in January). We do not think one should read too much into a few releases that came out stronger than expected, as there usually is some noise in the data. We think there are upside risks for core inflation due to more expansionary fiscal policy but it takes time for this to materialise.”

“On Wednesday, retail sales numbers for February are due for release. Retail sales fell unexpectedly in January which points to a slowdown in consumer spending. Yet, we think this was a fluke, as consumer confidence remains extremely high. Moreover, industrial production data for February are due out on Friday. PMIs for February indicate that US manufacturing expansion continues. Still, numbers concerning industrial production are usually quite volatile on a monthly basis.”

“The Fed’s black out period will begin on Saturday, which implies that there will not be any signals concerning monetary policy prior to the meeting on 21 March.”

“Markets will focus on Trump’s actions with regard to US trade policy as well as the reactions that they might provoke. Trump is expected to finalise the tariffs of 25% on steel imports and 10% on aluminium imports. However, it is not clear yet whether specific countries may be exempt which could be clarified in the coming week.”