Economic data released in the US during the course of the last week came in weaker than expected. The number of Americans filing for jobless benefits rose by 15,000, missing analysts’ prediction for a decline of 6,000 numbers. Further, core durable goods orders, which excludes transportation, increased by just 0.4 percent in February and fell short of economists’ estimates. Overall, orders for capital goods jumped 2.6 percent on month-on-month following the 5.2 percent gain recorded in January. These data do not confirm the optimistic projection given by the Fed as regards higher spending and the boost in business investments. What remains to be seen is if this a temporary setback or whether the trend would continue.
Some of the key data scheduled for release this include the German Ifo Business Climate, U.S. CB Consumer Confidence, U.S. Crude Oil Inventories, U.S. Unemployment Claims, U.S. Final GDP Data and Canadian GDP Data. Here is an outlook on the key releases for the coming week:
#1: Germany Ifo Business Climate (03/27/2017 Monday 8:00 GMT)
In Germany, the Ifo business confidence index improved in February. This has strengthened the projection of the central bank that economic growth has strengthened at the beginning of the year. The index rose to 111 level from the revised reading of 109.9 for the month of January. The reading for February came in better than analysts’ estimate of 109.6. The current economic conditions index rose to 118.4 from 116.9, while future expectations index edged up to 104 from 103.2. Germany’s economy grew at the fastest rate in five years and it is expected that the trend will continue in 2017 in spite of the uncertainties in the EU block. However, the nation is experiencing political uncertainty because of the elections scheduled to be held in September. Chancellor Angela Merkel has to face the Social Democratic party which has been gaining momentum over the past few months. In March, the German Ifo business confidence is expected to come in at 111.2.
#2: U.S. CB Consumer Confidence (03/28/2017 Tuesday 14:00 GMT)
The morale of the the consumers in the U.S. rose with CB consumer confidence index hitting the 114.8 mark in February. This is the highest reading for the index since July 2001. Economists had expected that the index would hit the 111 mark in February. Further, the current business conditions index increased from the previous month. Overall, the expectation of the consumers is that the economy would continue to expand in the coming months. Additionally, consumers also expect that the labor market would continue to remain tight. It is expected that the consumer confidence index would come in at 113.9 in March.
#3: Bank of Canada Governor Stephen Poloz Speaks (03/28/2017 Tuesday 14:10 GMT)
Stephen Poloz, governor of the Bank of Canada, is scheduled to speak at Durham College in Oshawa on Tuesday. Poloz warned earlier this month as regards the significant uncertainties that were buffeting Canada’s economic growth in the light of the new policies on trade tax announced by Trump. He suggested that an interest rate cut is due. However, many economists are of the opinion the next move of the central bank will be to increase the interest rate.
#4: U.S. Crude Oil Inventories (03/29/2017 Wednesday 14:30 GMT)
During the week that ended on March 17th, the oil prices dropped to their lowest level since late November 2016 after the crude oil stocks in the U.S. touched a record high of five million barrels. This was in total contrast to analysts’ expectation that the crude oil inventories will increase by about 1.9 million barrels. Further, the agreement between the Organization of the Petroleum Exporting Countries (OPEC) and some of the other non-OPEC producers to cut down output by as much as 1.8 million barrels per day (bpd) during the first half of the current year has not helped in any way in reducing the bulging oil stockpiles around the world.
#5: U.S. Final GDP (03/30/2017 Thursday 12:30 GMT)
The U.S. economy grew at the rate of 3.5 percent in the third quarter of 2016, recording the highest growth in as many as two years. The first GDP estimate that was published in October 2016 reported a growth of 2.9 percent. However, the growth was lukewarm in the first half of this year with an average reading of 1.1 percent though many economists continue to forecast a growth of around 2 percent for the full year. On the other hand, the Federal Reserve anticipates a growth rate of about 2 percent for the next couple of years.
#6: U.S. Unemployment Claims (03/30/2017 Thursday 12:30 GMT)
The number of new Americans filing claims for jobless benefits jumped to a seven-week high reading of 258,000 during the week that ended on March 18th. This took away the shine off the positive employment data that were being reported in the recent times. Economists had expected 240,000 new job seekers to file for unemployment benefits. The average number of claims for four weeks increased to 240,000 from 239,000 in the previous week.
#7: U.K. Current Account (03/31/2017 Friday 8:30 GT)
The current account deficit of the U.K. widened to £25.4 billion in the third quarter of last year after the deficit for the previous period was revised downward to £22.1 billion. However, the reading came in lower than analysts’ expectation for a shortfall of £27.4 billion. Bigger gaps were reported for trade and secondary income. These were partially offset because of a narrowing of the deficit in the primary income. The current account deficit equates to 5.2 percent of the country’s GDP, higher compared to the 4.6 percent reported for the second quarter.
The U.K. recorded a current account deficit of £20.9 billion with the European Union, which was lower compared to the deficit of £22.3 billion reported for the previous quarter. Meanwhile, the current account deficit with the non-EU countries widened to £4.6 billion from a surplus of £0.3 billion for the previous period.
#8: Canada GDP (03/31/2017 Friday 12:30 GT)
Canada’s GDP grew 0.3 percent in December 2016. This was in line with the market expectation. The reading for the month of November 2016 was revised upward to a growth of 0.5 percent. Originally, the growth rate for November 2016 was reported as 0.4 percent. In the fourth quarter of last year, the nation’s GDP expanded 0.6 percent following the 0.9 percent gain reported for the previous three month period. Domestic consumption rose 0.6 percent for the fourth quarter following an increase of 0.7 percent in the previous quarter. While exports improved, imports fell sharply. Further, business investment declined 2.1 percent, following the 0.5 percent drop in the third quarter of last year. Canada’s capital spending has declined for nine quarters in a row.