Watch Greece and U.S. jobs

Genevieve Signoret

Macro Views

Next week

Next week’s marketing moving highlights will be Greek debt talks and the U.S. jobs reports. For our full annotated events calendar, please scroll down.


USA GDP growth in Q4 was mainly driven by accelerating private consumption. USA GDP grew 2.6% q/q saar from 5.0% in Q3, slightly above our forecast (2.5%). Private consumption (4.3% q/q saar) contributed 2.9 percentage points to GDP growth. Private consumption had been accelerating since Q2 2014, when it grew at 2.5% q/q saar. The GDP slowdown from previous quarter was the result of surging imports (affecting net trade) and contracting government spending.

UK Q4 GDP slowed down to 0.5% q/q from 0.7% q/q in Q3.

The growth rate for IGAEMexico’sGDP proxy—slowed down to 2.0% y/y from 2.7% in November.

U.S. durable goods new orders surprised to the downside. New orders for core U.S. durable goods contracted by 0.8% y/y (a slower pace of contraction than the 1.3% observed in November). They had been expected to grow by 0.6%. But durable goods are choppy. We prefer to track the core index. Here the news was good: core capital goods accelerated to 2.8% from 0.5% in November.

The U.S. Conference Board consumer confidence index jumped to 102.9 from 93.1 a month earlier: its highest reading since August 2007 and well above its pre–Great-Recession average (100.1).


Euro area’s annual inflation rate according to Eurostat’s flash report slid deeper into negative territory in January to –0.6% from –0.2% in December. Consumer prices were pushed down by the plummeting energy prices (–8.9% y/y). Services prices rose 1.0%.

Core inflation slowed down in Japan. Japan’s annual inflation for the underlying index, which excludes food and energy, slowed down to 2.5% from 2.7% in November, while the headline number stayed stable at 2.4%. Excluding the effect of last April’s VAT hike, Japan’s core inflation rate slipped for the fifth consecutive month, to 0.5% in December from 0.7% the month before.


Monetary policy

The U.S. Federal Open Market Committee (FOMC) statementconfirmed our view that the Fed will hike rates hike in Q3 2015. The Fed left unchanged its monetary policy rate at 0.00–0.25%. The FOMC was unanimous in this decision. Whereas before the Fed described economic activity as “expanding at a moderate pace,” now they see it “expanding at a solid pace.” We picked up no signal in the communiqué suggesting that the first hike will come later than our forecast date range of Q3 2015.

In a surprise move, the Bank of Russia (BoR) cut its monetary policy rate by 200bp to 15.00%. In their statement, the BoR mentioned that “inflation pressure will be contained by decrease of economic activity.” Russia’s annual inflation came in at 11.4% in December.

Banxico left unchanged its monetary policy rate at 3.00%. The Governing Board said it still sees important downside risks for growth, including weak private consumption and inefficient government spending. Banxico admits that prolonged peso weakness creates an upside risk for inflation. In all, we read Banxico’s tone to be neutral.

Fiscal policy

Mexico’s Treasury (Hacienda) hedged last year against the risk that in 2015 oil prices would be low. To brace for 2016–2017, Luis Videgaray—the secretary of the Treasury—has announced multiannual spending cuts amounting to $8.3Bn, or 0.7% of GDP). He also signaled that Pemex and CFE will be announcing cuts too.


In Greece, Syriza—a left-leaning party—won last Sunday’s snap election. The victory was widely expected. Yet it seems that the agenda of Alexis Tsipras, the new prime minister, is more quarrelsome than previously thought. The formation of a coalition with a radical right party which strongly opposes Greece’s austerity and the refusal of the new finance minister to negotiate with the troika constitute a non-cooperative stance. Greece stock market fell 14.1% during the week while the yield on a 10-year Greek bond rose to 11.2%.

Next week: the details

Events in red are those most likely to shake markets.

During the week

  • Greece: New government debt negotiations. See comments above.

Monday 2 February

  • Global: Markit manufacturing PMIs (Jan, final).
  • China: NBS manufacturing PMI (Jan).  China’s January Markit PMI rose to 49.8 from 49.6 in December. Consensus: 50.2 (from 50.1 in Dec).
  • Russia: Consumer prices (Jan).
  • USA: President Obama presents 2016 budget. Personal income consumption and saving (Dec), PCE core inflation (Dec), ISM manufacturing index, Senior Loan Officer Opinion Survey (Q4). President Obama hopes to hike domestic and military spending. PCE core inflation—the Fed’s favorite— has been slowing down since October. Consensus: PCE core inflation, 1.3% y/y (from 1.4% in Nov); ISM manufacturing index, 54.8 (from 55.5 in Nov).
  • Turkey: Consumer prices (Jan).
  • Brazil: International trade (Jan).

 Tuesday 3

  • Korea: Consumer prices (Jan).
  • India: Monetary policy meeting (Jan). Consensus: no change from 7.5%.
  • Turkey: Consumer prices (Jan).
  • USA: Light vehicle sales (Jan).
  • Brazil: Industrial production (Dec).

Wednesday 4

  • Global: Markit services PMI (Jan, final)
  • USA: ISM non-manufacturing index (Jan).

Thursday 5

  • UK: Monetary policy meeting. We don’t expect any change in the Bank of England monetary policy stance. In its last meeting the Monetary Policy Committee achieved consensus, this one is the first after the euro area’s QE extension announcement. Consensus and TransEconomics: rate unchanged at 0.50% and asset purchase program unchanged at £375Bn.
  • USA: International trade (Dec). Consensus: trade balance, –$38.7Bn (from –39.0Bn in Nov).

Friday 6

  • Germany: Industrial production (Dec). Germany’s number will give us a preview from next week’s euro area’s industrial production. Consensus: no change from the previous month at –0.5% y/y.
  • USA: Non-farm payrolls and unemployment rate (Jan). As the Fed’s first hike gets closer, this report becomes more important. Non-farm payrolls: +231K (from +252K in Dec); unemployment rate: 5.5% (from 5.6% in Dec).
  • Brazil: Consumer prices (Jan).
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