Long-awaited US data, dovish central banks and Spanish politics

Following the 35-day government shutdown, that ended last month, the US begins publishing data on the economy again this week. December’s retail sales, and January’s CPI, PPI inflation and industrial production will all be released this week. Survey data is also released with the publication of February’s Empire State manufacturing survey and Michigan consumer sentiment.

All will provide a more accurate assessment of underlying US economic conditions – which we still consider to be solid. However, as ever, political risk presents the biggest threat to financial conditions and are likely to prove the most significant headwind to future economic activity. A deadline for a funding bill looms again at the end of this week. However, given the political damage incurred during the recent shutdown, we do not see any party keen for a repeat.