After all the excitement of last week’s economic data, Thomas Watts, Investment Analyst, abrdn Portfolio Solutions, comments on the economic data releases we can expect to see this this week, and what they might mean for investors;
“They say all you need is confidence, so what better way to start a busy February than checking in on European investors than with survey firm Sentix’s investor confidence data today.
“The numbers will act as a leading indicator of economic health due to investors and analysts being highly informed by virtue of their job, with changes in their sentiment an early signal of future economic activity. The survey itself asks about 2,800 investors and analysts to rate the relative 6-month economic outlook for the Eurozone with its sheer breadth and size potentially having a marked affect on financial markets, especially in Europe.
“With anticipation building towards a possible Bank of England (BoE) rate cut during the summer, details of building activity, specifically in the Construction sector could really have an effect on the central bank’s thinking. Construction Purchasing Manager Index (PMI) readings, much like the aforementioned investor confidence numbers, are very useful in aiding our understanding of the economic backdrop, as companies react quickly to market conditions, with their purchasing managers holding perhaps the most current and relevant insight into the company’s view of the economy.
“Staying with the domestic property market, Thursday will see the Royal Institution of Chartered Surveyors (RICS) release their House Price balance data. The numbers are vitally important, especially for the housing and wider market as the data they release represents the percentage of surveyors reporting a price increase in their designated area, acting as a prime measurement of housing inflation. To add context, above 0.0% indicates more surveyors reported a rise in prices, below indicates more reported a fall. With the previous reading sitting at -30%, but jumping from -43% two month ago, many will be hoping that the trend continues as hope that rates have peaked in the UK gain traction.
“Thursday will also bring with it Chinese inflation numbers, as well as US unemployment figures. Both pieces of data giving us an insight into how the two largest economies in the world are faring. With the fortunes of the two diverging somewhat over the previous year, the US economy remaining robust, whilst China’s reopening from Covid lockdowns patchy at best, it will be interesting to see if the data indicates any change in fortune.”
