Nurses’ strike and Mr Pill – The Week Ahead from Thomas Watts, abrdn

by | Feb 6, 2023

Thomas Watts, Investment Analyst at abrdn, comments on the economic data releases this week.

He said: “The beginning of the week starts with the greatest of ironies as Monday brings with it both a nurses’ strike and a talk from the Bank of England’s (BoE) aptly named Chief Economist, Hugh Pill.

“Due to speak about the central bank’s Monetary Policy Report at an online event hosted on Threadneedle Street, Pill has a strong influence on how the bank votes on future rate policy and so his formal addresses are often scrutinised by investors for any subtle clues on how he and his fellow members will vote.

“From what the BoE makes of the domestic economy to what the domestic economy is making should characterise the beginning of the week, as Tuesday sees Construction PMI figures released by the Office of National Statistics. The data comes from a survey of about 150 purchasing managers in the construction industry, all of whom are asked to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries and inventories. The data is highly thought of by economists as it acts as a leading indicator of economic health, businesses react quickly to market conditions and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

“Having given markets fairly mixed messages over the US Federal Reserve’s next steps in terms of rate policy, the head of the central bank, Jay Powell, will be speaking from Washington on Tuesday. With markets focussing on the positives from his previous speech rather than his argument that the Fed is not done with raising rates, it will be interesting to see the tone he takes after global stock markets optimistically rose nearly 5% last week.

“The coming week should be rounded off with the University of Michigan’s US Consumer Sentiment and Inflation Expectations Survey. The two sets of data should give us a more comprehensive view of the US economy, showing us just how confident the American consumer is feeling as well as the prices they expect to pay for goods over the coming year.”

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