US, UK Producer Price Index

In the US, the economic calendar is quite packed in terms of data releases. Market participants expect the core Producer Price Index (PPI) to continue to fall sharply, thus providing a slight respite for producers who are finding it increasingly hard to pass on price increases to consumers.

Meanwhile, given the labour market weakness and the lack of credit available to consumers, markets expect retail sales to continue to contract even in the holiday season. The trade balance figure for October, which is also due to be released this week, should be on a declining trend, reflecting both US economic weakness in terms of reduced imports and the fall in the oil price.

The University of Michigan and ABC Consumer confidence surveys are both expected to have remained at a near record low. A view on US property market through the MBA mortgage applications, along with wholesale and business inventories for October, will close this week's US data release.

On this side of the Atlantic, the German ZEW survey for December will kickstart the economic calendar for the week, and further declines are expected. On the activity side, market participants will evaluate the euro area industrial production figures for October, as well as the release of the Sentix investor confidence and the Eurozone labour costs.

In the UK, the data release will be limited yet will contain some important economic indicators. The main focus will be on the input and output Producer Price Index (PPI), both for the month of November. Meanwhile, in terms of activity, market participants will be able to view the UK industrial and manufacturing production figures for October. The British retail sales monitor will close this week's UK economic calendar.

This article has been prepared by Bank of Valletta plc, which is licensed to conduct investment services business by the MFSA, for your general information only. This information is not a solicitation or offer by the bank to acquire or sell securities, nor does it constitute any form of advice by the bank. Appropriate advice should be obtained before making any such decision. Past performance is not necessarily a guide to future performance and the value of your investments may fall or rise.