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Prices and the US consumer

| Posted by: Paul Donovan | Tags: Paul Donovan

  • China's export figures fell on the year, causing consternation in some quarters. However care is needed in interpretation. To the extent that China is paid Euro and Yen for its exports, the currency effects will distort the value of exports overall.
  • The Euro area offers consumer price inflation from Italy (seen negative) and Spain (seen positive), though for both there is no deflation, merely relative price shifts. The UK's consumer prices are likely to be negative, retail prices positive - oil and a supermarket price war dragging on the headline figures.
  • US producer prices should be subdued (energy has an important weight here). Kocherlakota of the Fed is scheduled to speak, again, and is likely to sound dovish, again.
  • US retail sales are expected to pick up as the effects of bad weather start to fade. Some of the weakness in retail sales has not been matched by other macro and micro indicators of consumer health, so these numbers may have heightened importance.