Macroeconomics: The Day Ahead for 16 February

  • Barrage of central bank speakers may run roughshod over busy run of data; digesting Japan Orders and Trade, China Home Prices, Australia jobs; awaiting US PPI, Housing Starts, Philly Fed and weekly jobless claims; Nestle tops corporate earnings run; France, Spain & US debt sales
  • US PPI: energy to pace headline rebound, core seen edging up in m/m terms, but still subdued; pipeline pressures continue to ease
  • US Housing Starts: further decline expected, but outright level only at lower end of longer-term average range
  • US Philly Fed set to edge up but still contracting, focus on Price indices after NY Fed survey jump
  • US Weekly Jobless Claims: expected to be fractionally higher, still at very low levels historically


The barrage of central bank speakers (RBA, ECB, BoE, Fed and BoC) today may well overshadow the run of data, which has Japan’s Trade record Trade deficit and Machinery Orders, China New Home Prices (eking out first small gain in a year), Australian labour data (weak for a second month) and Consumer Inflation Expectations (still high but falling) to digest, with US PPI, Housing Starts, Philly Fed Manufacturing & NY Fed Services surveys and weekly jobless claims ahead. Nestle tops the run of corporate earnings, above all from the aspect of how it intends to continue to pass through increased costs to consumers, along with Centrica, Commerzbank, Repsol and Standard Chartered in Europe, while North America looks to Agnico Eagle Mines, Fortune Brands, Hasbro and Iamgold. Govt bond supply takes the form of medium dated conventionals and OATeis in France, Spanish 4, 6 & 9-yr and US 30-yr TIPS. Equity and risk assets reaction to yesterday’s run of strong or solid US data underlines the point that markets’ risks appetite has at most been dented, rather than holed below the waterline by the recent re-pricing of Fed rate expectations, and that FOMO is not dead by any manner of means. This is perhaps most visible in USD Credit spreads, which are at the levels they were when the Fed first started tightening – see chart, which sits very uncomfortably with the continued deterioration in earnings, and earnings outlooks.

US IG vs HY Average Credit spreads

** U.S.A. – January PPI & Housing Starts, Feb Philly Fed Manufacturing **
Following on from the slightly higher than expected CPI and the very robust rebound in Retail Sales, US PPI is expected to see upward pressure from energy prices with a headline rise of 0.4% m/m, though the core ex Food, Energy & Trade measure is seen up just 0.2% m/m, but thanks to strong benign base effects, y/y rates are expected to fall to 5.4% (-0.8 ppt) and 4.0% (-0.6 ppt) respectively, and continue to point to easing pipeline pressures overall, though the Fed will above all be focussed on Services PPI, which has been subdued for a number of months (last 0.1% m/m 5.0% y/y). That said, it will also look to the Philly Fed survey, with the headline seen marginally better but still weak at -7.5 from -8.9, particularly Prices Paid and Received, which rebounded quite sharply in yesterday’s NY Fed Manufacturing survey. Yesterday’s sharper than expected rebound in the NAHB Housing Market Index (42 vs. exp. 37 and January 35) offers a glimmer of hope that the housing sector is stabilizing, though the sharp reversal in MBA Mortgage Applications (-7.7% wk/wk) suggests caution is the watchword, after the rebound in mortgage rates. Today’s Housing Starts (very much a lagging indicator for the sector) are seen falling -2.0% m/m to a still reasonable 1.355 Mln SAAR pace. Weekly Jobless Claims are also due, with a marginal 4K uptick to a still very low 200K anticipated, and following on from some very premature market chatter about easing labour market conditions, it would be wiser to reserve judgement in reaction to a sharper than expected rise, particularly as the recent fall owed much to seasonal adjustment quirks resulting in artificially low readings.

To view the full report and to sign up for daily market commentary please email

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now