US: Inflation, retail sales, and industrial production - Danske Bank

After a quiet week, there are some interesting data releases in the US next week, said analysts at Danske Bank. They see inflation expectations moving higher in the US but they expect CPI data for January to show that core inflation remains subdued.

Key Quotes: 

“The most important one is CPI on Wednesday. The first release of CPI core for December showed an increase of 0.3% m/m, higher than expected, which added fuel to the reflation theme. In a recent revision, it was revised down to 0.2% m/m, in line with what was expected. We estimate CPI core rose 0.2% m/m in January, implying a fall in the CPI core inflation rate from 1.8% to 1.7%. Despite CPI core inflation being below 2%, we still believe the Fed will continue its hiking cycle this year by raising the Fed funds rate three times.”

“Also, on Wednesday, we get retail sales for January, which we think will show private consumption got off to a fine start to 2018.”

“On Thursday, industrial production data for January is due. Both ISM and PMI manufacturing indicate the US manufacturing expansion continues but remember the actual production figures are quite volatile on a monthly basis.”