Morning Market Brief: February 12, 2024

Looking at US consumer prices?

Economic data releases out of Canada will be relatively light this week. However, that doesn’t mean financial market activity will be muted as all eyes will be on the US when January’s inflation rate is announced. The data could go a long way in determining the next steps of the US Federal Reserve Board. Here’s what else to watch out for this week.?

• Canada’s housing starts for January will be released on Thursday. In December, housing starts surged higher by 18%. This is a key measurement for the federal government, which is looking to increase supply to help balance out the market and alleviate affordability concerns.
• The big news, of course, comes from the US on Tuesday when the inflation rate for January will be announced. The annual inflation rate edged higher to 3.4% in December from 3.1% in November, due in part to a smaller decline in energy prices. US retail sales will be released on Thursday, which might give a glimpse into the health of the US consumer.
• Global economies will be busy with several key announcements, particularly in the UK. The UK unemployment rate comes on Tuesday, the UK inflation rate on Wednesday, a second estimate of Europe’s economic growth on Wednesday, Japan’s fourth-quarter economic growth on Wednesday night and UK gross domestic product growth on Thursday.
• Notable earnings in Canada over the week include Restaurant Brands International, Shopify, RioCan, Barrick Gold, Manulife, Canadian Tire, Air Canada and TC Energy. Key earnings in the US include Coca-Cola, Goodyear Tire and Cisco.

Like the prevailing theme over the past year, investors will be parsing through the critical economic announcements to try to predict the next decisions of major central banks. This is sure to move financial markets, which could experience some volatility as the global economy and monetary policy evolve. Recent comments from central banks suggest interest-rate cuts might not be coming in the first quarter of 2024, but they are on the table and appear likely at some point this year.

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