17thJanuary 2024
Wednesday
On Wednesday,January 17th, a trio of critical economic data announcements from China, GreatBritain, and the United States are set to significantly influence globalmarkets. China is prepared to unveil its Industrial Production statistics,measured year-over-year, offering insights into the country's manufacturingsector's health. Concurrently, Great Britain is expected to release itsConsumer Price Index (CPI), also on a year-over-year basis, which will providevaluable information about inflation trends in the UK economy. Over in theUnited States, the spotlight shifts to consumer behavior, with the release ofthe monthly Core Retail Sales and Retail Sales figures. These indicators arecrucial in assessing the vibrancy of the American consumer market and will giveinvestors and analysts a deeper understanding of current spending patterns inthe U.S. economy.
CNY - Industrial Production y/y
Industrial Production y/y is a pivotalindicator of economic well-being, as production plays a major role in drivingthe economy and swiftly responds to the fluctuations in the business cycle.
In November2023, China's industrial production saw a notable year-on-year increase of6.6%, surpassing the previous month's growth of 4.6% and exceeding marketexpectations of a 5.6% rise. This marked the most rapid expansion in industrialproduction since February 2022. The increase was primarily driven byaccelerated growth in mining (3.9% compared to 2.9% in October), manufacturing(6.7% from 5.1%), and utilities (9.9% up from 1.5%). Notably, production inspecific industries saw significant growth; electrical machinery productionrose to 10.6% from 9.8% in October, computer and communications increased to10.6% from 4.8%, and textiles grew slightly to 2.1% from 2.0%. Generalequipment production also experienced a turnaround, growing by 0.8% after aprevious decline of 0.1%. However, the growth rate softened in sectors likenon-ferrous metals (10.2%, down from 12.5%) and chemicals (9.6%, down from12.1%). Additionally, the decline in non-metal mineral output eased to -0.6%from -1.1%. For the first eleven months of 2023, industrial output hadregistered a growth of 4.3% compared to the same period in 2022.
TL;DR
Sector
Growth in November 2023
Previous Month's Growth (October)
1 Overall Industrial Production
6.6%
4.6%
2 Mining
3.9%
2.9%
3 Manufacturing
6.7%
5.1%
4 Utilities
9.9%
1.5%
5 Electrical Machinery
10.6%
9.8%
6 Computer & Communications
10.6%
4.8%
7 Textiles
2.1%
2.0%
8 General Equipment
0.8%
-0.1% (decline)
9 Non-Ferrous Metals
10.2% (softened growth)
12.5%
10 Chemicals
9.6% (softened growth)
12.1%
11 Non-Metal Mineral Output
-0.6% (eased decline)
-1.1%
The IndustrialProduction y/y forecast points to a minor dip from the previous figure of 6.6%to 6.3%.
The upcomingrelease of the Industrial Production y/y data is set for January 17that 02:00 AM GMT.
The last time,the Chinese Industrial Production y/y was announced on the 15thof December, 2023. You may find the market reaction chart (USDCNH M5) below:
GBP - CPI y/y
Consumer pricesare the primary drivers of overall inflation. This inflation plays a criticalrole in the valuation of currency, as increasing prices prompt central banks toelevate interest rates, adhering to their mandate of containing inflation.
In November2023, the UK witnessed a decline in its annual inflation rate to 3.9%, thelowest since September 2021, dropping from October's 4.6% and falling below theexpected 4.4%. This slowdown was largely due to a significant reduction intransport costs, which fell by 1.5% after previously increasing by 0.5%, mainlybecause of lower motor fuel prices, secondhand car costs, maintenance, repairs,and airfares. The recreation and culture sector also saw prices rise by 5.3%,down from 6.4%, influenced by costs in computer games, theatre admissions, andlive music events. Food and non-alcoholic beverage prices increased by 9.1%,less than the prior 10.1%, with notable changes in bread and cereals. There weremodest rises in alcoholic beverages and tobacco (10.2% up from 11%), clothingand footwear (5.7% up from 6.2%), and health (7.4% up from 8%). Housing andutilities prices continued to fall, decreasing to 3.4% from 3.5%. However,inflation rates remained unchanged for communication (8.1%), education (4.5%),and restaurants and hotels (7.5%). Additionally, the annual core inflation ratedropped to 5.1%, marking its lowest point since January 2022.
TL;DR
Sector
Inflation Rate in November 2023
Previous Rate (October)
1 Overall Annual Inflation
3.9%
4.6%
2 Transport
-1.5% (reduction)
0.5% (increase)
3 Recreation and Culture
5.3%
6.4%
4 Food and Non-Alcoholic Beverages
9.1%
10.1%
5 Alcoholic Beverages and Tobacco
10.2%
11%
6 Clothing and Footwear
5.7%
6.2%
7 Health
7.4%
8%
8 Housing and Utilities
3.4%
3.5%
9 Communication
8.1% (unchanged)
8.1%
10 Education
4.5% (unchanged)
4.5%
11 Restaurants and Hotels
7.5% (unchanged)
7.5%
12 Annual Core Inflation
5.1%
-
The forecast forGreat Britain's y/y Consumer Price Index (CPI) is expected to stayconsistent at 3.9%, mirroring the previous result.
The forthcomingrelease of Great Britain'syear-over-year Consumer Price Index (CPI)is scheduled for January 17th at 07:00 AM GMT.
The last time, the British CPI y/y wasannounced on the 20th of December, 2023. You may find the marketreaction chart (GBPUSD M5) below:USD - Core Retail Sales m/m
Themonth-over-month figures of Core Retail Sales are significant indicators ofconsumer spending, a vital component of economic growth. By excluding the oftenvolatile food and energy sectors, these Core Retail Sales figures give a moreaccurate reflection of the underlying patterns in consumer expenditure.
In November2023, the U.S. saw a slight increase in retail sales, excluding motor vehiclesand parts, with a growth of 0.2% over the previous month. This rise, whichfollowed a revised stagnation in October, exceeded market expectations of a0.1% decrease, signaling a marginal rise in consumer spending in non-automotivesectors.
The projectionfor the Core Retail Sales m/m suggests that there will be no change fromthe previous figure, remaining steady at 0.2%.
The last time,the US Core Retail Sales m/m data was announced on the 14thof December, 2023. You may find the market reaction chart (USDCAD M5) below:
USD - Retail Sales m/m
This metric isrecognized as the leading indicator of consumer spending, which forms asubstantial part of overall economic activity.
In an unexpectedturn, U.S. retail sales in November 2023 rose by 0.3%, a recovery from therevised 0.2% decrease seen in October, and notably higher than the forecasted0.1% decline. This rise marks a strong start to the holiday shopping season,with substantial growth observed in several sectors. Food services and drinkingplaces led the way with a 1.6% increase, followed by nonstore retailers at 1%,and health and personal care, as well as furniture stores, each recording a0.9% rise. Clothing stores saw a 0.6% uptick, while motor vehicles and partsdealers increased by 0.5%, and food and beverage stores went up by 0.2%. Incontrast, sales at gasoline stations dropped by 2.9% due to falling gas prices.Additionally, decreases were seen in miscellaneous retailers (-2%), electronicsand appliance stores (-1.1%), building material and garden equipment suppliers(-0.4%), and general merchandise stores (-0.2%). Excluding autos, gas, buildingmaterials, and food services, retail sales showed a robust growth of 0.4%. It'simportant to highlight that these retail sales figures do not account forinflation adjustments.
TL;DR
Sector
Sales Change in November 2023
1 Overall Retail Sales
+0.3%
2 Food Services and Drinking Places
+1.6%
3 Nonstore Retailers
+1%
4 Health and Personal Care Stores
+0.9%
5 Furniture Stores
+0.9%
6 Clothing Stores
+0.6%
7 Motor Vehicles and Parts Dealers
+0.5%
8 Food and Beverage Stores
+0.2%
9 Gasoline Stations
-2.9%
10 Miscellaneous Retailers
-2%
11 Electronics and Appliance Stores
-1.1%
12 Building Material & Garden Equipment Suppliers
-0.4%
13 General Merchandise Stores
-0.2%
14 Excluding Autos, Gas, Building Materials, and Food Services
+0.4%
The projectionfor month-over-month Retail Sales suggests that they will remain steady,matching the previous figure of 0.3%.
The upcomingrelease of the Core Retail Sales m/m and Retail Sales m/m data isscheduled for January 17th at 1:30 PM GMT.
The last time,the US Retail Sales m/m data was announced on the 14th ofDecember, 2023. You may find the market reaction chart (USDCAD M5) below:
