US: higher inflation and lower retail sales than expected
US: CPI (Jan.): 0.5% m/m vs 0.3% expected (prior: 0.2% revised from 0.1%)
- Yearly trend on headline inflation was stable at 2.1% y/y; core inflation was up by 0.3% m/m (vs 0.2% m/m expected and in prior month; stable at 1.8% y/y).
- Energy (3% m/m), apparels (1.7% m/m; related to import prices) and services (0.3% m/m) were responsible for the monthly rebound.
- Outlook on inflation points towards a rising trend; after moderate yearly trend in Q1, headline inflation should be close to 3% y/y in Q2, and core CPI above 2% y/y according to our scenario. 2018 average headline inflation should now reach 2.5% y/y and core inflation 2.2% y/y.
- This argues in favor of regular rate hikes from the Fed in Q1 and Q2-18, and in favor of 4 rate hikes this year.
US: Retail sales (Jan.): -0.3% m/m vs 0.2% expected (prior: 0% revised from 0.4%)
- Core sales were flat (0.4% m/m expected) and past month data were revised from 0.4% m/m to 0% m/m.
- Bad weather conditions and a pause after strong Q4 data partly explained the negative surprises on sales.
- Purchases on several items have reversed from the past two months (autos, building materials and electronics); non-store sales were flat after 0.5% m/m.
- Too early to see in these volatile data a reversal in US scenario, as supports should continue from the heathy labor and some fiscal easing.
US: Business inventories (Dec.): 0.4% m/m vs 0.3% expected (prior: 0.4%)
- Inventories have increased (notably ex-autos); but sales were still dynamic (0.6% m/m).
Eurozone: Industrial production (Dec.): 0.4% m/m vs 0.1% expected (prior: 1.3% revised from 1%)
- Except capital goods, momentum in production was positive for all major sectors.
- Yearly trend has reached 5.2% y/y, comparable to the high pace in activity reached before the crisis.
Germany: GDP (Q4-17): 0.6% q/q as expected (prior: 0.8%)
- Growth has been strong at year end; Eurozone GDP has also been confirmed up by 0.6% q/q in Q4-17.
Germany: CPI (Jan.): -1% m/m as expected (prior: 0.6%)
- Rising oil and food prices, while prices for leisure and clothes have weakened.
- Yearly trend has moderated from 1.6% y/y to 1.4% y/y.
Italy: GDP (Q4-17): 0.3% q/q as expected (prior: 0.4%)
- GDP was up by 1.6% y/y (1.7% y/y in Q3-17); Italy is under a progressive recovery, but it remains fragile.
Poland: GDP (Q4-17): 1% q/q vs 1.2% expected (prior: 1.2%)
- Activity was on an accelerating trend (5.1% y/y after 4.9% y/y in Q3-17).
Turkey: Current account (Dec.): -7.7bn USD vs -7.5bn expected (prior: -4.38bn revised from -4.2bn)
- Rising imports and weaker exports have increased trade and current account deficits.