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The economic calendar shows next week reports in the US include retail sales, inflation, and durable goods orders. According to analysts from Danske Bank, retail sales will be important to gauge the strength of the US economy currently.  

Key Quotes:  

“In the US, the most important data release next week is retail sales for January on Monday. In December, the retail sales control group fell by 1.8% m/m, which is the biggest drop since January 2000. It is concerning but our guess is that the drop was a one-off, as this release seems out of line with other data on consumer behaviour. We expect numbers to come in at 1.0% m/m (3.3% y/y, down from 3.5% y/y).”

“Next week also brings February CPI core which is due out on Tuesday. We expect CPI core rose +0.2% m/m in February implying a core inflation rate unchanged at 2.2% y/y.”

“Moreover, we will keep an eye on the NFIB Small Business Optimism Index on Tuesday, given the recession fears in financial markets.”

“On Wednesday, capital goods data for January is to be released. New capital goods orders have been on a descending trend since September last year, indicating a slowdown in investments at the beginning 2019. Overall, we expect investments to continue growing in 2019 but probably not at the same pace as in 2017 and 2018.”

“On Thursday, we get January new home sales numbers. We will continue to keep an eye on the housing market which has begun to show weakness, probably driven by higher mortgage rates.”

US-China trade talks are entering the final stage, which is also going to be the most difficult one, as challenges remain. The longer it takes to announce a summit between Donald Trump and Xi Jinping, the more markets will start to worry.”