Week Ahead: Australia Inflation and US Core PCE Price Index in Focus

This week’s key economic events span multiple days, focusing on inflation, consumer sentiment, and economic growth. On Monday, New Zealand Retail Sales QoQ is expected to show modest growth, supported by stable consumer spending. On Tuesday, it brings the US. CB consumer confidence may remain steady or rise slightly during ongoing economic uncertainty.

On Wednesday, the Australia monthly CPI report will be closely watched following the RBA’s recent rate cut, with inflation expected to continue its downward trend. On Thursday, it features Switzerland’s GDP QoQ, which is projected to maintain moderate growth, and U.S. Durable Goods Orders MoM. To wrap up the week, the release of the U.S. core PCE price index on Friday, the Fed’s preferred inflation gauge, is expected to hold at 2.8% YoY, signalling stable price pressures. These reports will play a crucial role in shaping market expectations for central bank policies and economic growth trends.

Here are the week’s key events:

Sunday, 23 February 2025: [GMT 21:45] NZD Retail Sales QoQ

In the first quarter of 2024, retail sales in New Zealand rose by 0.5%, exceeding the anticipated 0.3% fall, mainly driven by consumer confidence. Modest retail sales growth is projected for the following quarter as the consumer spending trend remains stable. The positive projection can be attributed to a resilient economy coupled with the steady improvement in consumer sentiment, with some experts forecasting that this positive momentum will persist, supporting continued retail activity.

(New Zealand Retail Sales YoY, Source: Trading Central)

Top US company earnings: Berkshire Hathaway B (BRKB), Zoom (Zoom)

Monday, 24 February 2025: No significant economic events

Tuesday, 25 February 2025: [GMT 15:00] U.S CB Consumer Confidence

The consumer confidence index of the United States as of January 2025 stood at 104.1, slightly below the estimated 105.7, indicating a marginal decline in consumer optimism. The February reading is expected to either remain steady or show a slight uptick as economic uncertainty and inflation continue to influence sentiment. Although the strong job market bolsters consumer confidence, concerns about inflation, rising costs, and geopolitical tensions create uncertainty, leading to a mixed outlook. As these factors evolve, consumer confidence is likely to remain somewhat subdued in the near term.

(U.S. CB Consumer Confidence, Source: Trading Central)

Top US company earnings: Home Depot (HD), Intuit (INTU)

Wednesday, 26 February 2025: [GMT 00:30] Australia Monthly CPI Indicator, [GMT 15:00] U.S. New Home Sales

As of December 2024, Australia's monthly CPI rose 2.5% for the year compared to 2.3% for November 2024. The primary contributors to this annual movement were food and non-alcoholic beverages (+2.7%), alcohol and tobacco (+5.8%), and housing (+1.5%). For January 2025, the CPI is expected to increase to 2.6%, up from 2.5% in December 2024. This may be driven by seasonal factors such as consumer spending following the holidays and back-to-school costs, along with the mounting fuel price due to global oil market volatility.

(Australia Monthly CPI Indicator Chart, Source: Trading Central)

In December 2024, new home sales in the U.S. were up 3.6% to a seasonally adjusted annual rate of 698,000 units, which beat expectations. This growth is attributed to an increase in new home inventories, giving buyers more choices. Economists expect that new home sales will continue to improve in the coming months due to stabilising mortgage rates and strong demand.

(U.S New Home Sales m/m Chart, Source: Trading Central)

Top US company earnings: Nvidia (NVDA), Salesforce Inc (CRM)

Thursday, 27 February 2025: [GMT 08:00] CHF GDP QoQ, [GMT 13:30] US Durable Goods Orders MoM, [GMT 23:50] Japan Retail Sales y/y

The Swiss economy grew by 0.4% in Q4 2024, indicating continued moderate growth, driven by gains in both industry and services. For Q1 2025, Switzerland’s GDP is expected to maintain this moderate growth trend, as the Swiss economy is supported by stable domestic demand and solid export performance. Despite global uncertainties like trade risks and the impact of monetary policy in the largest economies, the well-diversified economy of Switzerland is expected to grow steadily, slowly improving across major sectors.

(Swiss GDP Growth QoQ Chart, Source: Trading Central)

In December 2024, durable goods orders fell short of expectations when they reported a 2.2% decline versus an expected 0.6% gain. This decline was primarily due to a sharp drop in transportation equipment orders, which tend to be quite volatile. Excluding transportation, core durable goods orders showed resilience, indicating that business investment in machinery and technology remains strong. Durable goods orders are forecasted to experience a bounce back for January 2025 as firms restart investments, especially in capital goods and industrial equipment spurred on by improving business confidence and upgrades in technology.

(Durable Goods Orders MoM Chart, Source: Trading Central)

Top US company earnings: Walmart RBC (RY), Dell Tech (DELL)

Friday, 28 February 2025: [GMT 13:30] U.S Core PCE Price Index y/y, [GMT 13:30] Canada GDP m/m

Japan recorded a 3.7% increase in retail sales year-on-year, valued at around 16.123 trillion yen in December 2024, marking the highest level in six months. This growth was driven by robust performance in sectors such as textiles, clothing, personal goods, and non-store retailers. Looking ahead to January 2025, Japan’s retail sales are expected to increase 4.1% y/y, supported by moderate overseas economic expansion and a strengthening income-to-spending cycle.

(Japan Retail Sales y/y Chart, Source: Trading Central)

In December 2024, the U.S. Core PCE Price Index, which excludes food and energy, increased by 2.8% year-over-year, in line with expectations. This reflects that underlying inflation remains stable, with price pressures contained. The January 2025 reading is expected to stay at 2.8%, with inflation pressure easing somewhat on energy prices. The Federal Reserve's rate hike in the past seems to have achieved its goal of reining in inflation, and core inflation is expected to remain near its target range.

(U.S. Core PCE Price Index y/y Chart, Source: Trading Central)

In November 2024, Canada's economy slipped by 0.2%, primarily due to work stoppages affecting transportation and port operations, which led to declines in sectors like mining and oil extraction. However, preliminary estimates suggest a 0.2% rebound in GDP for December, mainly fueled by retail trade, manufacturing, and construction recovery. Growth will be supported mainly by the resolution of work disputes and memorial consumer spending during the holiday season.

(Canada GDP m/m Chart, Source: Trading Central)

Top US company earnings: Allianz ADR (ALIZY), BASF ADR (BASFY)

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