RBC Capital Markets

Week ahead: President Biden is set to unveil his multi- trillion economic program on Wednesday. The data calendar has China official PMIs (Wednesday), Euro area HICP inflation (see EUR), Canada January GDP (see CAD), US manufacturing ISM survey (Thursday), and US non-farm payrolls (see USD) among others. USD: We think the combination of improving unemployment claims and the re-opening momentum will help US non-farm payrolls (Friday) advance by about 750K in March. Re-opening also represents a source of upside risk to the unemployment rate, which we estimate will rise to 6.4% from 6.2% as the amount of labour force re-entrants slightly outpaces the change in employment.

EUR: We forecast euro area HICP inflation (Wednesday) to rise 1.1% y/y in March. In particular, the drag from energy should reverse this month as the effects of previous oil price falls drop out of the y/y calculation. If our expectation proves right, the result would be HICP inflation averaging 1% y/y in Q1, in line with the ECB’s expectations from its March forecast round. Moreover, Germany ‘flash’ CPI inflation will be out on Tuesday, and the final manufacturing PMIs across the region will be released Thursday.

GBP: The UK final Q4 GDP (Wednesday) and final manufacturing PMI (Thursday) are due.

AUD: As the government’s “JobKeeper” wage subsidy program approaches its end, focus will turn increasingly to the new weekly payrolls (Tuesday) series to gauge the impact on employment. It should be more timely in showing job losses than the usual monthly labour force survey. Next week’s payrolls release takes us to mid-March, and we are not expecting any fireworks in this timeframe, but by late April (with a reporting period through mid-April) we might start to see some job losses coming through.

CAD: RBC Economics sees no compelling reason to deviate from StatsCan’s +0.5% m/m January GDP nowcast due Wednesday. Full releases for wholesale trade and manufacturing reinforce this result, while retail trade came in better than the original ‘flash’ estimate. Hours worked were also 0.9% m/m higher in January, despite the 213K job decline in the month. For the new February nowcast, we are pencilling in a 0.3% m/m gain, reflecting further gains in hours worked (+1.4%) and a strong ‘flash’ retail estimate (+4.0%). ‘Flash’ estimates for wholesale trade (-0.4%) and manufacturing (- 1.0%) sales should weigh slightly, though the composition on the latter is likely better for the GDP add-up.

Citi

Brace yourself for a choppy week ahead. Month, quarter, and fiscal year end will inevitably introduce further distortion to price action, while signals remain mixed across asset classes. We also have a number of notable events, including an infrastructure announcement from Biden on Thursday and NFP on Friday. We expect a bid bias in the USD, given broader risk dynamics. US equity futures and yields are all heading lower, while oil prices are down almost 2%.

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