16thFebruary 2024
Friday
This upcoming Friday willfeature noteworthy economic data releases from both Great Britain and theUnited States. Great Britain is set to announce its monthly Retail Salesfigures, while the United States has scheduled the release of its monthly CoreProducer Price Index (PPI), Producer Price Index (PPI), and PreliminaryUniversity of Michigan Consumer Sentiment data.
GBP – RetailSales m/m
The monthly release of Retail Sales data, typically made available approximately 20 days after the close of the respective month, quantifies fluctuations in the aggregate value of sales within the retail sector, adjusted for inflation. This indicator assumes a paramount role as the primary barometer of consumer spending, which constitutes a substantial component of the broader economic landscape. It is also referred to as "Sales Volume" or "All Retailers Sales."
In December 2023, the UK experienced a significant 3.2% decrease in retail sales, a sharp contrast to the 1.4% rise seen in the previous month and surpassing predictions of a mere 0.5% decline. This drop was the steepest since January 2021. A notable factor was the 3.9% plunge in non-food store sales, attributed to consumers opting to buy gifts earlier in November. Specific sectors saw varying declines: department stores faced a 7.1% reduction, household goods stores decreased by 3.0%, clothing stores fell by 1.5%, and other non-food stores saw a 4.5% drop. Food sales also decreased by 3.1%, and non-store retailing, impacted by inflation, went down by 2.1%. Additionally, sales in automotive fuel reduced by 1.9%. On an annual basis, there was a 2.4% downturn in trade, deviating from the expected 1.1% growth. Overall, 2023 witnessed a 2.8% decline in retail sales, marking the lowest point since 2018.
TL;DR·UK retail sales dropped by 3.2% in December 2023, the largest decline since January 2021, after a 1.4% increase in November.
·Non-food store sales fell by 3.9%, with department stores down 7.1%, household goods stores 3.0%, clothing stores 1.5%, and other non-food stores 4.5%.
·Food sales decreased by 3.1%, non-store retailing by 2.1% due to inflation, and automotive fuel sales by 1.9%.
·Annually, retail trade fell by 2.4%, against an expected 1.1% growth, leading to a 2.8% overall decline in 2023, the worst since 2018.
The forecast is indicating an increase to 1.2% from the previous outcome of -3.2%.
The upcoming Retail Sales m/m data release is slated for Friday the 16th at 7:00 AM GMT.
The last time, British RetailSales m/m data was announced on the 19th of January, 2024. You may find the market reaction chat (EURGBP M5) below:
USD - Core PPIm/m
The Core Producer Price Index (PPI) month-to-month (m/m) metric gauges fluctuations in the prices of completed goods and services offered by producers, with food and energy components excluded. This data is typically published on a monthly basis, approximately 13 days after the conclusion of the respective month. It is important to note that the methodology for calculating this series was altered in February 2014. It should also be acknowledged that food and energy prices constitute a substantial 40% of the overall PPI, which has the effect of diminishing the significance of the Core PPI data. This specific metric is alternatively referred to as the Core Finished Goods PPI or the Core PPI for Final Demand.
In December 2023, the Core Producer Prices in the United States, which exclude volatile items such as food and energy, remained unchanged, continuing a trend seen in the previous two months of October and November. This stability contradicted market expectations, which had anticipated a 0.2% increase. When examining the data on an annual basis, the US core Producer Price Index (PPI) recorded a 1.8% increase in December. This represents a slight slowdown compared to the 2% growth observed in the preceding month and is notably below market forecasts, which had predicted a 0.9% increase. This trajectory in core PPI suggests a nuanced economic landscape, deviating from market projections and hinting at a more intricate economic environment.
TL;DR
Time Frame
Change in Core PPI
Market Expectations
Additional Details
1 December 2023
0.0%
+0.2% expected
Stable for 3 months including October and November
2 Annual (2023)
+1.8%
+0.9% expected
Slowdown from 2% in previous month; below expectations
The Core PPI m/m forecast suggests a marginal uptick, moving from the previous reading of 0.0% to0.1%.
The upcoming release of the PPIm/m data is scheduled for Friday the 16th at 1:30 PM GMT.
The last time, the US Core PPIm/m was announced on the 12th of January, 2024. You may find the market reaction chart (GBPUSD M5) below:
USD - PPI m/m
The Producer Price Index (PPI) for finished goods and services represents a monthly measurement of price fluctuations in products and services offered by producers. This economic indicator is typically released approximately 13 days after the conclusion of the respective month. It serves as a leading gauge for consumer inflation, as an increase in producer prices often leads to higher costs for consumers. The PPI encompasses various components, including Finished Goods PPI, Wholesale Prices, and PPI for Final Demand.
In December of 2023, there was an unexpected 0.1% decline in producer prices in the United States compared to the previous month. This decline followed a similar trend observed in November, defying forecasts that had predicted a 0.1% increase. The decrease in prices was primarily driven by a 0.4% drop in the cost of goods, marking the third consecutive monthly decline. The significant factor contributing to this decrease was a notable 12.4% fall in diesel fuel prices, even though gasoline prices did increase by 2.1%. In contrast, service prices remained stable, consistent with the trend seen in the previous two months. Notable fluctuations within the services sector included a 3.3% increase in costs related to securities brokerage, dealing, and investment advice, but there was a 5.5% decrease in margins for machinery and vehicle wholesaling. Additionally, the core Producer Price Index (PPI), which excludes food and energy costs, remained unchanged, contrary to expectations of a 0.2% rise. On an annual basis, the headline PPI rate increased slightly to 1% from 0.8%, which was lower than the anticipated 1.3%. Meanwhile, the core rate experienced a decrease, dropping to 1.8% from 2%, in contrast to market expectations of a 1.9% increase.
TL;DR·US producer prices decreased by 0.1% in December 2023, following a similar decline in November, contrary to a forecasted 0.1% increase.
·Goods prices fell by 0.4%, with diesel fuel prices dropping 12.4%, despite a 2.1% rise in gasoline prices.
·Service prices remained stable, with a notable 3.3% increase in securities brokerage and investment advice costs, and a 5.5% decrease in machinery and vehicle wholesaling margins.
·The core PPI (excluding food and energy) stayed unchanged, defying expectations of a 0.2% rise.
·The annual headline PPI rate slightly increased to 1% from 0.8%, below the expected 1.3%, while the annual core PPI rate decreased to 1.8% from 2%, against forecasts of a 1.9% increase.
According to the PPI m/m forecast, there is an expected increase to 0.1% from the previous -0.1%.
The upcoming release of the PPIm/m data is scheduled for this Friday the 16th at 1:30 PMGMT.
The last time, the US PPI m/m was announced on the 12th of January, 2024. You may find the market reaction chart (GBPUSD M5) below:
USD - PrelimUoM Consumer Sentiment
The Preliminary University of Michigan (UoM) Consumer Sentiment Index is a composite measure derived from surveys of consumers and is released on a monthly basis, typically around the middle of the month. Two versions of this data are published, with a 14-day gap between them - the Preliminary and Revised releases. The Preliminary release, being the earlier of the two, tends to exert the most significant influence on market sentiment. This index serves as a leading indicator for consumer spending, a crucial component of overall economic activity. The survey involves approximately 500 respondents who are asked to assess the current and future economic conditions, providing valuable insights into consumer sentiment.
In January 2024, the University of Michigan consumer sentiment index for the United States was adjusted upward to 79, surpassing the preliminary figure of 78.9 and marking its highest level since July 2021. The expectations component of the index also saw an upward revision, rising to 77.1 from the previous 75.9, while the sub-index measuring current conditions was slightly revised downward to 81.9 from its earlier reading of 83.3. Meanwhile, the inflation expectations for the year remained steady at 2.9%, representing the lowest level since December 2020. Additionally, the 5-year inflation outlook was revised upward to 2.9% from its prior figure of 2.8%.
TL;DR
Component
Final Reading
Preliminary/Previous Reading
Note
1 Overall Sentiment Index
79
78.9
Highest since July 2021
2 Expectations Index
77.1
75.9
3 Current Conditions Index
81.9
83.3
Slightly revised downward
4 1-Year Inflation Expectations
2.9%
2.9%
Steady, lowest since December 2020
5 5-Year Inflation Outlook
2.9%
2.8%
Revised upward
The PreliminaryUoMConsumer Sentiment report is expected to show a modest rise to 79.5, up from the previous reading of 79.
The upcoming PreliminaryUoMConsumer Sentiment report is set to be released on Friday the 16that 3:00 PM GMT.
The last time, the US PreliminaryUoM Consumer Sentiment report was announced on the 19th of January, 2024. You may find the market reaction chart (USDJPY M5) below:
Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.
