What to Watch - Week of 10 February 2025

Tapas Strickland | Markets Research 

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Past Week

• Locally, Retail Sales for December came in better than expected with quarterly volumes up 1.0% q/q vs. 0.8% expected. The data support the assessment that consumption growth was improving from the trough in H1 2024 through to the end of the year
• Offshore it was a volatile start to the week with the US initially announcing a 25% tariff on Canada and Mexico, both countries threatening retaliation, and following discussion tariffs being suspended for month. A 10% tariff on China though was implemented, and China retaliated

Week ahead

• Australian data flow is light with only the NAB Business Survey and Westpac Consumer Confidence (both Tuesday). These are unlikely to shape views ahead of the RBA’s February meeting. Profit reporting season also picks up steam with CBA the first domestic bank to report (Wednesday).
• Offshore focus remains on possible tariff announcements. China’s retaliation to the US’ 10% tariff is due to come into effect (Monday). Additionally, US President Trump noted at the end of January that he would impose product specific tariffs during February
• US Fed Chair Powell gives Testimony (Tuesday and Wednesday), CPI/PPI for January will pre-date potential tariff impacts (Wednesday and Thursday), and Retail Sales is released (Friday)
• In Europe, it is very quiet with no top-tier data in the Euro area. In the UK, Q4 GDP (Thursday) is the most notable, along with a speech by BoE MPC member Mann who recently made a road to Damascus conversion from being the most hawkish, to dissenting in favour of a 50bp cut.
• As for China data, the CPI/PPI (Sunday) will likely set the tone for the week, while Aggregate Financing figures are due anytime in the week
• NZ has mostly second-tier data with Card Spending (Thursday) and Selected Price Indicators and the BNZ Manufacturing PMI (Friday)

Chart 1: Australian datas beat, NZ and China disappointing expectations

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