We'll do our preview of the week's main events shortly but first of all, a PSA from DB's Jim Reid who says to "standby for a manic Monday as the world tries to come to terms with the “shock” tariff announcements from Mr Trump’s administration on Saturday night." And even though he says "shock", all Trump did was follow through on exactly what he’s been saying he’s going to do since November, even though the market has refused to take that threat seriously, completely under-pricing the risks. So, this leaves the weekend news as a severe shock.
With that in mind, a preview of the week ahead feels a little parochial now given the weekend news but here it is anyway. In the US, we have the jobs report on Friday, and the ISM indices (today and Wednesday) leading the way. Elsewhere, the focus will be on the BoE decision in the UK (Thursday) and Alphabet (Tuesday) and Amazon (Thursday) earnings as part of 124 S&P 500 and 77 Stoxx 600 companies reporting.
Looking first at payrolls, DB's economists look for a moderation in the headline (175k vs. +256k previously) and private (150k vs. +223k) release but with higher uncertainty than usual around this. Firstly, the LA wildfires occurred during the survey week, which could reduce payrolls by -20k based on historical comparisons. Secondly, January's gains have been large over the last two years with the low layoff rates perhaps colliding with aggressively seasonal adjustments, although it could have been warm weather that was not prevalent this January. Thirdly, there are BLS benchmark revisions to deal with after last August's preliminary estimates. This could also influence the unemployment rate and make the data discreet from the December release which would now have a different population control to January's with the new revisions.
Staying in the US, other notable US data includes the University of Michigan's consumer sentiment on Friday (median forecast 72.0 vs 71.1) including the inflation expectations series which has seen some extreme partisan differences in expectations since the election. There will also be the US Treasury borrowing estimates and the quarterly refunding announcement (Wednesday). There are also lots of Fed speakers this week and this will give them their first chance to opine on possible policy implications of the Trump tariff news. We have a selection of these highlighted in the day-by-day week ahead calendar at the end.
For the Bank of England, our UK economist expects the MPC to deliver its third rate cut of the cycle, taking Bank Rate to 4.5% (75bps below its peak) with a 8-1 vote tally. There will also be new economic projections from the MPC as well as a supply projections update from the Bank. We’ll also see January CPI for the Eurozone today with the regional numbers already out. In China, notable releases feature the Caixin PMIs (services on Wednesday after manufacturing earlier today) after the official gauges released last week came in below forecasts. Remember China is on holiday until Wednesday.
Here is a day-by-day calendar of events
Monday February 3
Tuesday February 4
Wednesday February 5
Thursday February 6
Friday February 7
Finally, looking at just the US, Goldman writes that the key economic data releases this week are the ISM manufacturing and services reports on Monday and Wednesday and the employment report on Friday. Tariffs on Mexico, Canada, and China are set to take effect on Tuesday. The are many speaking engagements from Fed officials this week, including Vice Chair Jefferson on Tuesday and Governor Bowman on Wednesday.
Monday, February 3
Tuesday, February 4
Wednesday, February 5
Thursday, February 6
Friday, February 7
Source: DB, Goldman