The main release today will be the US ISM manufacturing index for February, where we look for a slight rebound to 52.3 following the sharp drop in January to 51.3. The drop in January was to a large extent probably related to adverse weather and we believe this effect abated somewhat in February. Overall, we believe there is some real slowing taking place in the US economy, but the level of ISM is probably lower than the true underlying level. Bear in mind though that the weather was also bad in February so there is quite a bit of uncertainty attached to the numbers also in February. The US will also release personal spending and core PCE deflator. The GDP data on Friday showed a decent downward revision to Q4 and this will also be reflected in the January data as the base effects from Q4 will be smaller. Also note that the core PCE was revised up to 1.3% in Q4 from 1.1%. This will also be reflected in today's number. We look for a rise in nominal spending of 0.1% and a rise in both headline and core PCE of 0.1% - leaving real spending flat in January.
Final PMI data are due to be released before noon for the euro area in which Spanish and Italian PMI are included. UK PMI will also attract some attention. We generally look for a little softening as global trade is losing a bit of pace due to the slowdown in the US and China.
Finally, ECB president Mario Draghi is due to speak in Brussels at 15:00. For the rest of the week we look forward to the ECB meeting on Thursday and US non-farm payrolls on Friday.
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