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(Bloomberg) — The full extent of Germany’s industrial decline in 2023 will be revealed next week with a slew of data likely to hit a new post-pandemic low.
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Exports, factory orders and production in Europe’s largest economy are all expected to fall in December, according to the median forecast of economists, based on three days of announcements.
The overall picture could confirm that, barring the shock of the pandemic, output from the industrial base, long seen as the region’s driving force, is now at its lowest decline since the years after the global financial crisis. There is.
Industrial giant Siemens will report results on Thursday, potentially providing further insight into the extent of the manufacturing slump that has only temporarily hung over Germany, leaving Chancellor Olaf Scholz’s fractious coalition in turmoil. are doing.
The government succeeded in passing a new budget for 2024 on Friday, but the three-party alliance will now have to operate with almost no deficit in 2025 following a court ruling banning the use of off-balance-sheet funds. is also likely to be maintained. Loggerhead turtle.
Bloomberg Economics says:
“Europe’s largest economy has been suffering from recession in recent quarters, but has so far narrowly avoided one. Industrial weakness could be the main driver of GDP contraction in the final quarter of 2023. Highly sexual.”
—Click here for full analysis
Against this backdrop, Scholz may be happy to escape Berlin and focus on foreign affairs when he meets President Joe Biden at the White House on Friday.
Other officials may find it difficult to avoid discussing the fate of the economy. Finance Minister Christian Lindner is scheduled to speak in Frankfurt on Monday, while Bundesbank President Joachim Nagel is scheduled to attend an event in Paris on Friday.
Elsewhere, decisions from central banks from Australia to India to Mexico are likely to keep interest rates on hold, and the Paris-based OECD plans to update its forecast.
Click here to find out what happened last week. Below is a summary of what will happen next in the global economy.
USA and Canada
The US economic calendar looks much brighter after a flurry of news, including the high-profile monthly jobs report and the Federal Reserve’s first policy meeting of the year.
On Monday, the Institute for Supply Management releases the Service Index. Economists predict that service provider activity has grown at a faster pace than at the beginning of the year.
Over the weekend, the government is expected to announce the annual recalculation of the seasonal adjustment factors used to create the consumer price index. This update covers from 2019 to 2023.
Economists, including Federal Reserve officials, will be closely monitoring changes after the government’s last recalculation showed an upward revision to the inflation rate in 2022.
Meanwhile, investors focused on speeches from Fed officials Loretta Mester, Neal Kashkari, Susan Collins, Thomas Barkin and Adriana Kugler, and Chairman Jerome Powell appeared on CBS News on Sunday night. It all started with an appearance on 60 Minutes.
Looking north, Statistics Canada is scheduled to release its employment figures for January. The focus is on wage growth, which is still rising at an annual rate of 4-5%, even as the labor market eases.
Bank of Canada Governor Tiff Macklem is scheduled to speak in Montreal about the effectiveness and limits of monetary policy. The central bank is also expected to announce an outline of its decision to keep interest rates unchanged last month.
Asia
The Reserve Bank of Australia will meet after slower-than-expected inflation in the final quarter of 2023, increasing speculation about a policy change by mid-year. Economists expect the bank to keep its cash rate target unchanged at 4.35% on Tuesday.
As the market assesses the prospects for a rate cut in May or June, the focus will be on comments from Governor Michel Block, who will hold his first press conference after the meeting.
Among other central banks, Thailand is expected to keep interest rates unchanged on Wednesday, keeping options open as inflation could rise again in the second half of the year.
The Reserve Bank of India is also expected to keep borrowing costs unchanged on Thursday.
Japan’s wage data on Tuesday will help shape views on whether the Bank of Japan will end its negative interest rate policy in March or April.
China on Thursday released key inflation data confirming that deflation is weighing on the economy, with CPI estimated at -0.6% in January, compared with -0.3% the previous month.
Some expect the Chinese government to finally launch economic stimulus measures to support sentiment ahead of the Lunar New Year holiday.
Major consumer prices in Thailand are expected to fall, and the Philippines will also provide the latest information on price trends.
Indonesia’s economic growth was probably about stable year-on-year in the fourth quarter. Other reports include Singapore retail sales and China money supply.
Europe, Middle East, Africa
It’s been a quiet week in the euro zone after a series of major interest rate decisions over the past month.
Highlights include the publication of the European Central Bank’s survey on consumer inflation expectations and the attendance of officials including chief economist Philip Lane and board member Piero Cipollone.
Besides Germany, in the euro zone, Italy and Spain are expected to release production reports for December, and further afield Sweden, Norway, Denmark, Hungary and the Czech Republic are also expected to release similar data. Inflation rates for Hungary and Norway will also be announced.
Governor Erik Teddine will testify before parliament on Tuesday following the Swedish National Bank’s decision to cut interest rates this year. The minutes of the meeting will be published the next day.
This calendar features a number of central bank decisions in Europe.
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Icelandic officials are expected to reveal their first decisions for 2024 on Wednesday as global trends move towards lower interest rates.
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Polish policymakers are expected to remain unchanged on the same day.
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The Czech central bank is expected to cut interest rates on Thursday.
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Serbian officials will clarify whether they want to keep borrowing costs unchanged.
Traders will focus on Turkey’s January inflation data on Monday. Analysts expect it to remain stable at around 65%. The central bank expects the rate of inflation to start slowing from around the middle of this year. However, the surprise resignation of the country’s monetary policy chief late on Friday and his replacement by a deputy minister may distract investors.
Three central bank decisions on Africa are expected on Tuesday.
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Kenya may keep borrowing costs unchanged at 12.5% after an unexpected 200 basis point hike to curb inflation and support the shilling.
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Neighboring Uganda may cut interest rates as inflation slows, with real interest rates among the highest in the world.
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Further east in Madagascar, interest rates are likely to remain unchanged amid concerns about inflation.
latin america
Next week, Brazil, Chile, Colombia and Mexico will release January consumer price data, following Peru’s February 1 report that inflation had slowed to within target range.
Colombia could see a headline decline of nearly 100 basis points, Brazilian print is expected to hit the target range for the third straight month and analysts expect Chile to slow for the 14th consecutive month.
Mexico is where the disinflationary trend could be shaken, with some analysts predicting a return to 5%.
At the beginning of the week, Colombia’s and Brazil’s central banks will publish the minutes of their January monetary policy deliberations.
Brazil’s central bank did not change its guidance and clearly signaled a sixth straight half-point rate cut in March, while Banco de Colombia cut rates by a cautious 25 basis points in a dovish-sounding post-decision statement. Ta.
At this week’s rate-setting meeting, Banxico is in no hurry to cut rates. Analysts expect borrowing costs to remain at 11.25% since March of last year, but Peru is almost certain to fall to 6.25% for the sixth straight quarter, with inflation currently just below 1-3%. 2 basis points below. % target range.
–With assistance from Vince Golle, Monique Vanek, Brian Fowler, Piotr Skolimowski, Robert Jameson, Paul Wallace, and Laura Dhillon Ken.
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