2017 Economic Calendar
POWERED BY  econoday logo
U.S. & Intl Recaps   |   Event Definitions   |   Today's Calendar   |   



Waiting for Washington policy proposals
International Perspective - February 10, 2017
By Anne D. Picker, Chief Economist


Global Markets

Most equity indexes advanced last week with gains ranging from 0.1 percent (CAC and Kospi) to 2.4 percent (Nikkei). With little updated economic information especially in the U.S., earnings received close scrutiny from investors. Potential fiscal policy changes in the U.S. garnered heightened global attention.


Three central banks in Asia — the Reserve Banks of Australia, India and New Zealand — left their respective monetary policies unchanged.


Reserve Bank of Australia

As expected the Reserve Bank Board decided to hold the overnight cash rate unchanged at 1.5 percent at their first meeting in 2017. The commentary in the Governor Philip Lowe's statement was a little more upbeat than had been in December. In particular the global view was lifted froml growth "lower than average" to "growth above trend in a number of developed economies." Another aspect of the importance of global growth has been the ongoing strength in commodity prices. This statement notes that the terms of trade have risen and this will boost national incomes.


The statement addressed the reported contraction in the economy in the September quarter. It attributed it to "temporary factors" with the RBA expecting a return to reasonable growth in the December quarter. While consumption is expected to remain moderate, non-mining investment is anticipated to show "some pick up". Comments on the labour market were largely unchanged with conditions described as mixed. The RBA remains confident that the most recent inflation report was in line with expectations and both headline and underlying inflation are expected to rise above 2 percent over the Bank's forecast period.


In its quarterly statement on monetary policy released later in the week, the Reserve Bank of Australia slashed its economic growth forecasts but flagged a possible return to above-trend growth by the end of 2017.


Reserve Bank of India

The Reserve Bank of India left its repurchase rate unchanged at 6.25 percent. Most analysts expected a 25 basis point cut. The decision to keep rates on hold was agreed to by all six of the members of the Monetary Policy Committee. The MPC said the current policy stance is consistent with their medium-term goal of keeping headline inflation in a target range of 2.0 percent to 6.0 percent. The MPC also shifted its characterization of its policy stance from accommodative to neutral suggesting the chances of a rate cut in coming months have also diminished.


In the statement accompanying the decision, the RBI said that liquidity conditions have "re-balanced" in recent weeks, with an expansion of currency in circulation and new bank notes being injected into the system "at an accelerated pace". This appears to have eased cash shortages and improved sentiment. The statement made clear that the main concern for the RBI right now is the inflation outlook. Officials noted that headline CPI inflation moderated in November and December but said that this was primarily driven by sharp declines in the price of vegetables and pulses.


Officials currently expect inflation to increase to around 4.5 percent to 5.0 percent in the second half of next fiscal year but also identify significant upside risks to this forecast, including higher oil prices, exchange rate volatility and increased labour costs. Given this outlook, MPC members clearly saw little case for a rate cut and look likely to remain wary about easing policy in coming months unless the inflation outlook improves.


Reserve Bank of New Zealand

As expected, the Reserve Bank of New Zealand left its overnight cash rate (OCR) unchanged at 1.75 percent. The decision follows the release of inflation data for the three months to December. Consumer prices were up 1.3 percent on the year and up strongly from 0.2 percent in the three months to September. This is the first time headline inflation has been back in its target range since late 2014. The statement accompanying the RBNZ decision noted that the increase in headline inflation partly reflected base effects as the impact of previous declines in oil prices dropped out of calculations. Officials expect inflation will "gradually" return to 2.0 percent, the mid-point of the 1 percent to 3 percent target range, reflecting their view that inflation expectations remain well-anchored around that level.


The RBNZ is now more confident about the global outlook and notes that higher commodity prices have pushed up global inflation. They were also positive about the outlook for the domestic growth outlook, with low policy rates offsetting the impact of what they still consider to be an over-valued domestic currency.


Global Stock Market Recap

  2016 2017 % Change
Index Dec 31 Feb 3 Feb 10 Week 2017
Australia All Ordinaries 5719.1 5672.5 5771.59 1.7% 0.9%
Japan Nikkei 225 19114.4 18918.2 19378.93 2.4% 1.4%
Topix 1518.61 1514.99 1546.56 2.1% 1.8%
Hong Kong Hang Seng 22000.6 23129.2 23574.98 1.9% 7.2%
S. Korea Kospi 2026.5 2073.2 2075.08 0.1% 2.4%
Singapore STI 2880.8 3041.9 3100.39 1.9% 7.6%
China Shanghai Composite 3103.6 3140.2 3196.70 1.8% 3.0%
India Sensex 30 26626.5 28240.52 28334.25 0.3% 6.4%
Indonesia Jakarta Composite 5296.7 5360.8 5371.67 0.2% 1.4%
Malaysia KLCI 1641.7 1685.0 1698.94 0.8% 3.5%
Philippines PSEi 6840.6 7226.7 7235.21 0.1% 5.8%
Taiwan Taiex 9253.5 9455.6 9665.59 2.2% 4.5%
Thailand SET 1542.9 1583.0 1585.24 0.1% 2.7%
UK FTSE 100 7142.8 7188.3 7258.75 1.0% 1.6%
France CAC 4862.3 4825.4 4828.32 0.1% -0.7%
Germany XETRA DAX 11481.1 11651.5 11666.97 0.1% 1.6%
Italy FTSE MIB 19234.6 19116.0 18862.11 -1.3% -1.9%
Spain IBEX 35 9352.1 9462.7 9378.10 -0.9% 0.3%
Sweden OMX Stockholm 30 1517.2 1557.3 1562.73 0.3% 3.0%
Switzerland SMI 8219.9 8350.8 8456.22 1.3% 2.9%
North America
United States Dow 19762.6 20071.5 20269.37 1.0% 2.6%
NASDAQ 5383.1 5666.8 5734.13 1.2% 6.5%
S&P 500 2238.8 2297.4 2316.10 0.8% 3.5%
Canada S&P/TSX Comp. 15287.6 15476.4 15729.12 1.6% 2.9%
Mexico Bolsa 45642.9 47225.1 47797.040 1.2% 4.7%


Europe and the UK

Most European equity indexes advanced on the week. Earnings remained the focus of investors but sentiment also received a boost from positive data from both the UK and China. The FTSE was up 1.0 percent, both the CAC and DAX inched up 0.1 percent and the SMI was 1.3 percent higher. Only the MIB and IBEX retreated on the week. Investors were also encouraged by comments from U.S. President Donald Trump, who vowed to announce a 'phenomenal' tax reform plan in the next few weeks.


Traders continue to keep a close eye on news from the White House as President Trump continues to announce his policies. Concerns over the upcoming European elections also continue. Investors remain focused on the forthcoming elections in Europe and are looking for more clarity on U.S. President Donald Trump's policies with respect to bilateral trade, immigration and foreign affairs. There are Dutch, French and German elections between March and September. Investors were encouraged by reports that Mr Trump took on a more conciliatory tone in a recent phone conversation with the President of China. Rising crude oil prices also helped to boost investor sentiment.


According to ECB Executive Board member Yves Mersch, the European Central Bank cannot cut interest rates to an unlimited extent and its communication has to be adjusted without delay to drop the guidance on lowering rates further to protect the bank's credibility. "As from a certain level, it becomes more attractive to keep cash — despite the associated costs — than to pay negative interest rates." Earlier in the week, European Central Bank President Mario Draghi testified before the European Parliament. Draghi stated that the recent resilience shown by the euro area economy in the face of several negative shocks suggests it is on the right track, but it still requires monetary policy stimulus to bring inflation to the target in a sustainable way. "Our December decisions strike a balance between our growing confidence that the euro area's economic prospects are firming up, and — at the same time — the lack of a clear sign of sustained convergence of inflation rates towards the desired level,"


European economic data were mixed last week. On the positive side, German factory orders jumped 5.2 percent in December — the fastest pace since July 2014. However, December industrial output tumbled 3.0 percent — the sharpest decline since April 2009. Industrial output advanced in Italy and the UK but retreated in France. The UK merchandise trade deficit narrowed but so did Germany's surplus.


Asia Pacific

Equities rallied in Asia led by those in Japan. The Nikkei was up 2.4 percent on the week followed by the Topix with a gain of 2.1 percent. Stocks jumped Friday especially in Japan after U.S. President Donald Trump promised a "phenomenal" tax plan to lower the burden on American businesses in the next 2 to 3 weeks." The statement lifted the U.S. dollar to a 1-1/2-week high against the Japanese yen. Oil futures added to overnight gains after China's January exports and imports easily beat expectations. The Shanghai Composite was up 1.8 percent and the Hang Seng added 1.9 percent for the week as investors cheered the better than expected merchandise trade data.


Japanese shares rallied as the yen weakened against the U.S. currency ahead of Prime Minister Shinzo Abe's meeting with Mr Trump over the weekend. Media reports suggested that Prime Minister Shinzo Abe will put forward an economic co-operation package including a $150 billion five-part investment package in U.S. infrastructure when they meet. Trading volumes remained rather thin in the wake of growing concerns over political instability in Europe and lingering uncertainty over U.S. President Donald Trump's policies.


The Bank of Japan's holdings of Japanese government bonds has topped 40 percent of the outstanding balance for the first time the BoJ said Wednesday. The BoJ has been snapping up JGBs in large quantities since it implemented drastic monetary easing measures in April 2013. Statistics released by the bank show that its JGB holdings stood at about ¥358 trillion as of the end of January or about 40 percent of the outstanding total of some ¥894 trillion. Last September, the BoJ switched its policy focus from quantity to interest rates, aiming to keep long-term rates at around zero percent to achieve its inflation target. Nevertheless, its JGB holdings continue to rise, with the bank sticking to its annual target of ¥80 trillion for JGB purchases.


Shares in China and Hong Kong declined Tuesday after data showed that China's foreign reserves fell more than expected in January, sending their stockpile to just under the psychologically important $3 trillion level. The $12.3 billion drawdown last month, while smaller than in recent months, still put reserves below the psychologically important $3 trillion level. Three years ago, they were at nearly $4 trillion. When they were last at $3 trillion, in early 2011, China's economy was growing at a much faster pace — and the PBoC's foreign exchange reserves were growing rapidly.



After declining the last four weeks, the U.S. dollar advanced against its major counterparts including the yen, euro, Swiss franc and the Canadian and Australian dollars. It was unchanged against the pound sterling. With a very light U.S. calendar, traders here focused on statements emanating from the new administration — especially those dealing with trade and taxes. It should be noted none of the intentions that have been floated have been converted into legal proposals that Congress could consider. Markets don't like uncertainty.


Selected currencies — weekly results

2016 2016-17 % Change
Dec 30 Feb 3 Feb 10 Week 2016
U.S. $ per currency
Australia A$ 0.7215 0.768 0.768 -0.1% 6.4%
New Zealand NZ$ 0.6948 0.731 0.720 -1.6% 3.6%
Canada C$ 0.7443 0.788 0.764 -3.0% 2.7%
Eurozone euro (€) 1.0534 1.078 1.064 -1.3% 1.0%
UK pound sterling (£) 1.2333 1.248 1.249 0.0% 1.2%
Currency per U.S. $
China yuan 6.9450 6.867 6.879 -0.2% 1.0%
Hong Kong HK$* 7.7533 7.758 7.758 0.0% -0.1%
India rupee 67.9238 67.316 66.884 0.6% 1.6%
Japan yen 116.8100 112.780 113.400 -0.5% 3.0%
Malaysia ringgit 4.4862 4.428 4.444 -0.4% 0.9%
Singapore Singapore $ 1.4465 1.408 1.421 -0.9% 1.8%
South Korea won 1205.8300 1147.700 1150.980 -0.3% 4.8%
Taiwan Taiwan $ 32.3260 31.020 31.063 -0.1% 4.1%
Thailand baht 35.8100 35.010 35.060 -0.1% 2.1%
Switzerland Swiss franc 1.0174 0.9930 1.0029 -1.0% 1.4%
*Pegged to U.S. dollar
Source: Bloomberg


Indicator scoreboard


December manufacturing orders rebounded following a sharper revised 3.6 percent drop in November. Orders expanded 5.2 percent on the month, their largest increase since November 2010 and enough to lift annual growth from 2.1 percent to fully 7.6 percent. The year-end surge was wholly attributable to capital goods where orders were up 9.7 percent from November when they slumped 6.8 percent. By contrast, basics declined 0.6 percent while consumer and durable goods were off 1.8 percent. Geographically, the monthly gain was roughly evenly spread. The domestic market was up 7.9 percent and overseas demand 7.4 percent stronger.


December industrial production tumbled 3.0 percent following a marginally stronger revised 0.5 percent monthly rise in November. December's output was its worst performance since January 2009 in the midst of the Great Recession. Annual growth slumped from 2.3 percent to minus 0.6 percent, its first negative print since last July. The monthly plunge reflected broad-based losses among the major production categories. Capital goods (5.4 percent) were especially weak but consumer goods (3.1 percent) were not far behind. Intermediates (1.1 percent) held up slightly better as did energy (0.9 percent). Elsewhere construction was down 1.7 percent. Total manufacturing fell 3.4 percent after just a 0.4 percent increase in November.


December seasonally adjusted merchandise trade surplus was €18.4 billion, down from a minimally larger revised €21.8 billion in November. Unadjusted, the surplus weighed in at €18.7 billion, little different from the €18.4 billion posted a year ago. The adjusted year-end reading was the smallest since November 2014 and reflected a 3.3 percent monthly decline in exports and flat imports. The decline in the former unwound much of the previous period's 3.9 percent bounce and was the first decrease in three months. Compared with a year ago, exports now show an unadjusted rise of 6.3 percent while imports are up 7.4 percent. December's setback puts the seasonally adjusted surplus at €60.8 billion over the fourth quarter as a whole, a decline of 1.6 percent from the July to September period.


United Kingdom

December total industrial production was up 1.1 percent on the month which, after revisions to the earlier data, put annual growth at 4.3 percent, its highest mark since January 2011. The key manufacturing sector output expanded 2.1 percent from November, its best performance since April 2014. The increase here was dominated by pharmaceuticals, which alone added 0.5 percentage points to the monthly change in industrial production, together with metal products (0.4 percent) and other manufacturing & repair (0.2 percent). The only decline of note was in coke & petroleum (4.3 percent). Elsewhere, the volatile mining & quarrying sector posted a 1.1 percent monthly drop while electricity & gas was down 2.0 percent and water supply flat.


The December deficit on global goods trade narrowed from a downwardly revised Stg11.56 billion in November to a smaller than expected Stg10.89 billion. The headline improvement was due to a 4.4 percent monthly increase in exports, mainly machinery and transport equipment and material manufactures. This was their third solid increase in a row and easily more than eclipsed a 1.4 percent increase in imports. Both series saw new record highs. The shortfall with the rest of the EU weighed in at Stg8.78 billion, up slightly from Stg8.58 billion in mid-quarter, while the deficit with the rest of the world was Stg2.11 billion, down from Stg2.98 billion last time.




December private sector machinery orders (excluding volatile items) were up 6.7 percent on the month (seasonally adjusted) after a drop of 5.1 percent in November. This series, which excludes orders for ships and those from electric power companies, is considered a proxy for capital expenditures. In seasonally adjusted terms, orders were up 9.4 percent on the year after increasing of 3.6 percent in November. Manufacturing orders rose a monthly 1.0 percent after an increase of 9.8 percent in November. Non-manufacturing orders (excluding volatile items) were up 3.5 percent after dropping 3.5 percent in November.



December retail sales slipped 0.1 percent (seasonally adjusted) in December after an increase of 0.1 percent in November. On the year, retail sales were up 3.0 percent. The weak growth reflected lower sales for household goods retailing (down 2.3 percent) and other retailing (down 0.2 percent). The declines were partly offset by higher sales for food (0.5 percent), clothing, footwear & personal accessory (0.3 percent), cafes, restaurants & takeaway food services (0.2 percent) and department stores (0.1 percent).



January trade surplus rose to $51.35 billion from $40.82 billion in December. Exports rose 7.9 percent on the year after declining 6.1 percent in December. In seasonally adjusted terms, exports fell 8.4 percent on the month and rose 8.1 percent from a year ago. Export growth was broad-based across major trading partners. China's exports to the United States rose 6.2 percent on the year after increasing by 5.1 percent the month before. Exports to the European Union also strengthened, up 2.9 percent in January after falling by 4.8 percent in December. Similarly, exports to Japan rebounded from a fall of 5.6 percent on the year in December to an increase of 9.2 percent in January. Imports were up 16.7 percent on the year after increasing 3.1 percent in December. In seasonally adjusted terms, imports fell 11.5 percent month-on-month and rose 17.6 percent year-on-year. In local currency terms, China's trade surplus rose from 275 billion yuan in December to 355 billion yuan in January. Exports rose 15.9 percent on the year, while imports rose 25.2 percent on the year.




December merchandise trade surplus was C$0.9 billion, down slightly from November's revised C$1.0 billion. Exports were up 0.8 percent on the strength of higher energy product prices. Seven of 11 sections declined however. Imports increased 1.0 percent, mainly on stronger imports of aircraft and industrial machinery. Six of 11 sections declined. However, in real (or volume) terms, exports were down 1.4 percent in December as a result of declines in metal ores and non-metallic minerals as well as motor vehicles & parts. Import volumes were up 0.4 percent on higher real imports of industrial machinery, equipment & parts. Consequently, Canada's trade surplus with the world in real terms narrowed from $2.9 billion in November to $2.1 billion in December. Exports to the U.S. edged up 0.2 percent while imports were 1.3 percent higher. Consequently, Canada's merchandise trade surplus with the United States narrowed from $4.7 billion in November to $4.4 billion in December. Exports to countries other than the United States rose 2.6 percent while imports from countries other than the United States were up 0.5 percent.


January employment surprised with a gain of 48,000 while the unemployment rate declined 0.1 percent to 5.8 percent. Following a significant increase in December, full-time employment was up 15,800 while part time workers were up 32,400. The participation rate edged up to 65.9 percent from 65.8 percent the month before. Nearly all of the employment growth in January came from the service sector, with increases in finance, insurance, real estate, rental & leasing, business, building & other support services, transportation & warehousing and public administration. On the other hand, there were fewer people working in information, culture & recreation. The private sector added 32,000, building on the strong growth in the second half of 2016. Both public sector employment and the number of self-employed workers were little changed.


Bottom line

The Reserve Banks of Australia, India and New Zealand kept their respective monetary policies on hold last week. Most equity indexes were higher on the week as earnings remain mostly positive and the U.S. currency advanced against its major counterparts. The Canadian labour market continues to improve but most of the jobs were part time.


There are no central bank meetings this week but the minutes of its mid-January meeting will be released by the European Central Bank on Thursday. Internationally, gross domestic product data will be reported by the Eurozone, Germany, Italy and Japan. Price data — both consumer and producer — will give us a global picture of inflation. The status of labour markets will be reported by the UK, France and Australia. 


Looking Ahead: February 13 through February 17, 2017

The following indicators will be released this week...
Feb 14 Eurozone Gross Domestic Product (Q4.2016 preliminary)
Industrial Production (December)
Germany Gross Domestic Product (Q4.2016 preliminary)
ZEW Survey (February)
Italy Gross Domestic Product (Q4.2016 preliminary)
UK Consumer Price Index (January)
Producer Price Index (January)
Feb 15 Eurozone Merchandise Trade (December)
UK Labour Market Report (January)
Feb 16 France ILO Unemployment (Q4.2016)
Feb 17 UK Retail Sales (January)
Asia Pacific
Feb 13 Japan Gross Domestic Product (Q4.2016 first estimate)
India Consumer Price Index (January)
Feb 14 China Consumer Price Index (January)
Producer Price Index (January)
Feb 16 Australia Labour Force Survey (January)
Feb 15 Canada Manufacturing Sales (December)


Anne D Picker is the author of International Economic Indicators and Central Banks.


powered by [Econoday]