This week, investors and economists will be closely monitoring the latest Consumer Price Index (CPI) data releases from the US and the UK. The CPI is an important economic indicator that measures the changes in the prices of goods and services that households purchase. As it provides insight into the overall inflation trend, the data release has a significant impact on financial markets and central bank policies.
With inflation being a hot topic in recent months, traders and analysts alike will be eager to see if the numbers will continue to trend upward or if they will show a slowdown.
Here are key market events for the week ahead:
Switzerland’s Consumer Price Index (13 February)
In December 2022, Switzerland’s CPI saw a decline of 0.2% compared to the previous month. This drop showed a decrease in the annual inflation rate, which fell to 2.8% year-on-year in December 2022, marking the lowest inflation rate recorded in Switzerland since April 2022.
Looking ahead to January 2023, analysts are forecasting another decrease in Switzerland’s CPI of 0.1%. This decrease is expected to bring down the annual inflation rate further to 2.7%.
UK Claimant Count Change (14 February)
The UK saw a rise in the number of people claiming unemployment benefits in December 2022, with a total increase of 19,700 claims compared to the previous month of November 2022, which saw a rise of 16,100 claims.
For January 2023, analysts forecast a drop in claims with an estimated 12,000 new claims expected. While the UK continues to face challenges in the labor market, this expected decrease in claims could indicate a positive shift towards job stability and economic recovery.
US Consumer Price Index (14 February)
US CPI saw a decrease of 0.1% in December 2022 compared to the previous month, marking the first time the CPI has declined since May 2020. This decrease led to a slowdown in the annual inflation rate, which fell to 6.5% in December 2022, and marks the sixth consecutive month of slowing inflation and is the lowest reading since October 2021.
Analysts are forecasting a slight increase in the US CPI for January 2023, with an expected 0.4% month-on-month growth. The annual inflation rate is expected to be slower at 6.3%.
UK Consumer Price Index (15 February)
UK CPI dropped to 10.5% in December 2022, down from 10.7% in November. This marks the second month of slowing inflation, with a rate of 10.5% being the lowest in three months after reaching a peak of 11.1% in October.
Analysts forecast that the UK annual inflation rate will continue to slow down to 10.3% this month.
US Retail Sales (15 February)
Retail sales in the US decreased by 1.1% in December 2022 compared to the previous month, after an earlier revised decrease of 1% in November.
Analysts predict a modest increase in US retail sales this month, with an estimated growth of 0.6%.
US Empire State Manufacturing Index (15 February)
The New York Empire State Manufacturing Index showed a significant decline, reaching a low of -32.9 in January 2023. This represents the fifth-worst contraction ever in business activity in the state of New York.
Analysts forecast a slight improvement for February 2023, with an expected reading of -19.
US Producer Price Index (16 February)
In December 2022, producer prices in the US decreased 0.5% month-on-month, following a 0.2% increase in November, marking the largest monthly decline since April 2020. This suggests that inflationary pressure in the US is cooling.
Analysts predict another 0.4% drop in US PPI for January 2023.
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