Kiwi Policy Makers Weigh Inflation In Decision (page 1 of 2)

UK Nationwide Confidence (FEB) (00:01 GMT; 19:01 EST)
Consensus: n/a
Previous: 98

Outlook: Although economists have not made official predictions regarding the Nationwide Building Society 's consumer confidence survey, other recently released indicators suggest that February sentiment may be on the soft side. The similar GfK poll at the end of February revealed a drop in consumer confidence to -4 from -3 in January. Additionally, the U.K.'s labor market has not shown any significant improvements from a dramatic weakening in 2005. This has been reflected in poor spending patterns across the nation. Having the most significant effect on Nationwide's consumer confidence survey is January's surge in oil prices. With bleak employment prospects, stifling energy prices likely had an adverse effect on the psyche of the British consumer. Declining consumer optimism has already been visible in contracting durable goods sales. If the Bank of England does not have intentions of loosening policy any time soon, then clearly the Bank will not be counting on domestic consumption to jumpstart the nation's economy given the lack of consumer enthusiasm.

Previous: According to Nationwide, consumer confidence in January increased on more positive employment situations. Nationwide's index rose to 98 from 97 the previous month. Of those surveyed, 59% felt that many jobs were available in the British economy. While not as high as November of 2005, this was an improvement from the 54% who felt the same way in December. As the nation's present economic conditions improved in consumers' minds, expectations for the future decreased. Only 13% of those surveyed felt that economic conditions would improve in coming months. Nearly twice as many felt that conditions would worsen, while the majority of those surveyed felt that conditions would remain the same. Although overall confidence improved on the month, the improvement was not drastic. Similarly, sales at the retail level did not grow immensely. While shoppers took advantage of post-holiday clearances, purchasing of food, clothing, and footwear were weaker than expected, reflecting the minimal gains in confidence.


Japanese Leading Economic Index (JAN) (15:00 GMT; 10:00 EST)
Consensus: 85.0%
Previous: 81.1%

Outlook: Japan's broadest index of expected economic activity over the coming three to six months is expected to rise for the second consecutive month in January as the country's consumers continue to push the economy into its long awaited inflationary condition. Forecasts of January's leading index are for a rise of 85.0 percent for the fourth consecutive month of an optimistic tilt, the longest string since August of 2004. A reading above 50.0 percent indicates those expected conditions to improve in the coming months outpaces those expecting it to decline. January saw another slew of data to support optimism. Consumers were met with a jobless rate still near its recent low and a fifth month of increased earnings. This pushed consumer confidence to 49.5. Though it is still below a majority of optimists, it is the highest level in the measure's short history. While businesses were also feeling the positive affects of faster consumer spending, a 2.1 percent monthly decline in the value of exports accompanied the country's first trade deficit in five years in January. Although this indicator, even if stellar, will not be the final straw for the Bank of Japan to finally abandon its ultra-loose monetary policy scheme; it will be an additional gauge of consumers' willingness to continue to spend and subsequently drive sustainable inflation.

Previous: Citizens of the world's second largest economy were unexpectedly more confidence about the coming three to four month's in December as consumers and businesses were presented with a number of reasons to believe economic activity would continue to accelerate.