Economic week ahead: Out with the old, in with the new

With most global markets expected to end 2013 on a high note, various economies and investors across the globe are increasingly optimistic about 2014.

Barring any unpleasant surprises, most global markets are expected to close out 2013 on a high note this week. With signs of strength emerging in various economies, policymakers, economists and investors across the globe are increasingly optimistic about 2014. Here is your guide to the economic week ahead.


The South African Revenue Service (Sars) will release last month’s preliminary trade figures on Monday. This week’s report will be the second month in which trade data for Botswana, Lesotho, Namibia and Swaziland – the BLNS countries – are included.

Because South Africa has historically run a trade surplus with the BLNS countries, including them makes the country’s overall trade gap look better. Sars reported a R12.4-billion trade deficit for October. Excluding the BLNS countries, however, the gap stood at R21-billion.

Including the BLNS countries, the cumulative deficit reported for 2013 through October was R76.1-billion, up from R38.6-billion for the same period in 2012. Excluding the BLNS countries, the cumulative deficit for 2013 through October was R146.6-billion, up from R106.2-billion in 2012.

On Tuesday, the South African Reserve Bank will release last month’s M3 money supply and private sector credit extension data and officials in Kenya and Uganda will release consumer inflation snapshots.

Consensus is that South Africa’s money supply growth slowed to 6.9% from a year earlier in November from 7.1% growth in October. Credit extension growth likely slowed to 7% year-on-year growth last month from 7.6% growth in October.

Closing out the week, policymakers at the Bank of Uganda will announce their first rates decision of 2014 on Friday. Officials cut the country’s benchmark rate by 50-basis points to 11.5% at their December meeting in a bid to boost growth. With inflation pressures on the wane, the central bank is likely to continue its accommodative policy stance.

United States
Despite the mid-week holiday, America’s data diary is fairly full this week. The National Association of Realtors’s (NAR’s) pending home sales index and the Federal Reserve Bank of Dallas’s latest regional manufacturing survey results will get things rolling on Monday.

Markets expect the NAR’s index – a leading indicator of housing activity – to have risen 1.5% in November following a 0.6% decline in October. The Dallas Fed’s general business activity index – based on a monthly survey of manufacturers in Texas – is expected to post its seventh consecutive positive reading in December.

On Tuesday, the S&P/Case-Shiller 20-city home price index is expected to show a 1% gain for October. The Institute for Supply Management (ISM)’s Chicago manufacturing purchasing managers’ index (PMI) – widely viewed as an indicator of national manufacturing performance – is expected to have slipped a bit from its exceptionally strong readings of 65.9 in October and 63 in November to 61.3 in December. And the Conference Board’s consumer confidence index is likely to climb to 76.8 from 70.4 in November.

On Thursday, weekly jobless claims figures are likely to show that roughly 338 000 Americans filed for first time federal unemployment benefits in the week ended December 28, the same number filing in the prior week. The ISM’s manufacturing composite index is likely to slip to a reading of 57 from 57.3 in November. And figures from the US Census Bureau may show that construction spending rose 1% from October to November.

Finally, on Friday, the US’s latest vehicle sales figures are likely to show that total vehicle sales fell to 16-million in December from 16.4-million in November.


With the exception of a few retail sales reports, no major data releases are scheduled in Europe on Monday or Tuesday and markets are closed on Wednesday for the New Year’s holiday.

When markets re-open for trading on Thursday, attention will focus on manufacturing PMI readings for Russia, Ireland, Sweden, Hungary, Poland, Turkey, Spain, the Czech Republic, Italy, France, Germany, Greece and the eurozone as a whole.

The eurozone’s reading is expected to remain unchanged from flash results released earlier this month. These preliminary results showed that the eurozone’s manufacturing PMI rose to a 31-month high of 52.7 in December. Any number above 50 signals expansion. Germany – the continent’s largest economy – is likely to hold steady in expansion territory at 54.2, but France – the continent’s number two economy – will probably remain mired in negative territory at a reading of 47.1.

Also on Thursday, analysts expect the United Kingdom’s manufacturing PMI to have risen to a reading of 59.2 in December from 58.4 in November. If the forecast proves accurate, this would mark the UK’s strongest reading since February 2011 and would suggest growth of 1.2%, quarter on quarter, in the three months to December.

On Friday, Britain’s Building Societies Association will report its latest mortgage statistics, Nationwide will release its house price indices and the Bank of England will release mortgage approvals, net consumer credit, secured lending and money supply figures.

Eurozone money supply figures for November are also due out on Friday.


India will release fiscal deficit data for the April to November period on Tuesday. Finance Minister P Chidambaram has repeatedly asserted that he will keep India’s spending gap to government’s target of 4.8% of gross domestic product (GDP) for the 2014 fiscal year, which ends in March, but many analysts believe the country will overshoot its target.

In a research note released earlier this month, analysts at HSBC said that they expect India’s 2014 fiscal deficit to total 5.1% of GDP. Similarly, researchers at ratings agency CRISIL Research said last week they expect government to overshoot its deficit target by 0.40% in the 2014 fiscal year.

On Thursday, attention will shift to India’s manufacturing purchasing managers’ index (PMI) readings. Analysts will be looking to see if the index shows improvement after three consecutive months of decline.

Also this week, the Reserve Bank of India (RBI) is expected to release a special report on monetary policy. Governor Raghuram Rajan established a panel of experts in September – headed by RBI monetary policy head Urjit Patel – to examine the bank’s current monetary policy framework and make recommendations for increasing transparency and predictability.

Economists at Nomura expect the committee to recommend price stability as the central bank’s primary policy objective. The committee’s report is also expected to discuss which inflation indicator should be used in setting policy, among other issues.

Elsewhere in the region, markets will be on the lookout for Hong Kong’s latest retail sales figures on Thursday and China’s official services PMI on Friday.

Matt Quigley – Mail & Guardian.