Russia launches full-blown invasion of Ukraine

Chris Scicluna
Emily Nicol

Japanese department store sales up in January, but still well below pre-pandemic level
While clearly of secondary importance, the overnight release of Japan’s department store sales in January suggested, at face value at least, a further notable pickup in spending at the start of the year. In particular, the headline figures reported an acceleration in the annual rate of increase by 6.8ppts to 15.6%Y/Y, with a firmer pace of growth in clothing (18.4%Y/Y), accessories (29.2%Y/Y) and food (8.5%Y/Y). And Tokyo departments store sales were up an even stronger 23.9%Y/Y. While sales were initially supported by New Year discounting, growth was also flattered by a particularly low base a year ago – the weakest January outturn since 1978. Indeed, higher frequency data suggests that the surge in coronavirus cases and renewed containment measures dampened spending through the second half of the month. And when compared to January 2020 just before the onset of the pandemic, department store sales were still down by more than 20%.

French consumer confidence falls back on inflation worries
Like in Germany’s equivalent survey yesterday, the French consumer confidence survey published by INSEE this morning reported an unexpected decline in the headline sentiment indicator in February, by 1pt to 98, matching the level seen in November but still the second-lowest reading of the past year and below the long-run average (100). Within the detail, households assessed their standard of living to have deteriorated by the most since August, due principally to a marked increase in price expectations, with the respective index jumping 16pts to its highest since April 2011. So, while consumers were their least concerned about unemployment since 2007, the share of households assessing it to be a good time make major purchases was only very marginally improved from January – indeed, while the respective index was broadly in line with its long-run average, it was still some 12pts lower than last summer’s peak.

US GDP growth to be revised up, but new home sales to be down
The US dataflow will bring January’s new home sales figures and the second estimate of Q4 GDP, as well as usual weekly jobless claims data and the Chicago Fed national activity indices. Daiwa America’s Mike Moran expects the estimate of Q4 GDP growth to be pushed up by 0.6ppt to a robust 7.5%Q/Q annualised, but new home sales to fall back more than 3% not least due to the prospect of higher mortgage rates. In terms of Fed-speak, Richmond Fed President Thomas Barkin and Cleveland Fed President Loretta Mester will speak publicly about the economic outlook while SF Fed President Mary Daly will participate on the BoE panel discussion on unwinding QE.

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