In the US this week the impeachment trial of former US president Donald Trump gets under way while his successor Joe Biden begins the push to get his $1.9tn stimulus package through Congress. China celebrates the year of the Ox, Italy waits to see whether Mario Draghi can form a unity government and Scotland’s former first minister Alex Salmond is due to appear before a parliamentary committee investigating the handling of harassment complaints against him. On the economic data front, inflation figures in the US and China will be closely watched and the UK has its first print of fourth-quarter gross domestic product out. Drugmaker AstraZeneca, Disney, ride-hailing platform Uber and UK retailer Ocado are among the week’s corporate earnings highlights
Trump impeachment
The US Senate trial of Donald Trump is set to begin on Tuesday after he was impeached last month in a bipartisan vote in the House of Representatives.
The former US president is charged with inciting an insurrection in connection with the January 6 siege on the US Capitol, when a mob of his supporters stormed the legislative complex in an attack that left five people dead.
Trump is the first president in US history to be impeached twice after he was acquitted in a Senate trial last year of charges of abuse of power and obstruction of Congress.
Trump is likely to be acquitted again given that two-thirds of the Senate needs to vote to convict him under the US Constitution.
The upper chamber of Congress is split 50-50, and all but five Republican senators have backed a motion arguing whether the trial is constitutional given that Trump is now a private citizen.
Impeachment managers and Trump’s lawyers have both filed legal briefs setting out their arguments ahead of the trial.
House Democrats said the evidence was “overwhelming” that Trump had committed a “grievous betrayal of his oath of office”.
Trump’s lawyers said he had “fully and faithfully executed his duties as president of the United States” and had simply “exercised” his free-speech rights under the First Amendment of the Constitution to “express his belief that the election results were suspect” in the run-up to the Capitol assault.
What to expect from Donald Trump’s second impeachment trial
Joe Biden/Stimulus package
Congressional committees will start crafting legislation this week on specific components of President Joe Biden’s $1.9tn stimulus package.
While Biden has engaged in some negotiations with moderate Republicans on a compromise, he is leaning towards passing a version of it with only Democratic support, to avoid seeing it watered down excessively.
Last Friday, the US Senate passed a bill approving a process in the upper chamber that will allow Democrats to approve Biden’s stimulus measures with a simple majority of votes.
Friday’s bill was approved with Kamala Harris, the vice-president, casting the tiebreaking vote after a 50-50 split between the two parties. The potential for large-scale new economic stimulus, along with hopes for widespread vaccination distribution, has bolstered confidence in a significant US economic recovery in 2021, after last year’s contraction.
A CBS interview with Biden will also air before the Super Bowl, the president’s first TV network interview since taking office.
Democrats hit back at Summers after criticism of stimulus bill
Biden defends stimulus plan as US struggles to add back jobs
Biden’s bipartisanship at the crossroads
Italy
Mario Draghi will continue his attempts to win enough support among lawmakers to form a new unity government or risk the country heading towards snap elections.
Draghi has accepted a request from Italy’s president to attempt to form a national unity government as the country battles to contain the Covid-19 pandemic and the most severe economic crisis in its postwar history.
To succeed, the former European Central Bank president must convince enough of the country’s political parties to back him.
He has built a reputation as one of the continent’s most highly regarded public officials, and will try to win the support of business and unions this week.
Mario Draghi: the euro’s saviour called to serve Italy
Salmond testimony
Former Scottish first minister Alex Salmond is on Wednesday due to appear before a parliamentary committee investigating the Holyrood government’s handling of harassment complaints against him.
Salmond has accused first minister Nicola Sturgeon, once his closest political ally, of not telling the truth about encounters in 2018 when he approached her over a civil service-led investigation against him.
The Scottish government later accepted the investigation was “tainted by apparent bias” and Salmond was last year acquitted of all 13 sexual offence charges against him.
Salmond’s testimony will draw attention to the bitter rift between the current and former leaders of the ruling Scottish National party and the high political stakes involved in the committee inquiry at the parliament in Edinburgh.
Any evidence that Sturgeon misled the committee would be politically disastrous for the first minister, who polls suggest is on course to lead the pro-independence SNP to a sweeping victory in Scottish parliamentary elections scheduled for May.
Sturgeon has vehemently denied misleading parliament and has accused her former mentor of spreading conspiracy theories to distract from his own shortcomings.
She is set to give her oral evidence on February 16.
Nicola Sturgeon under pressure over vaccine rollout and Alex Salmond allegations
Sturgeon rejects Salmond claims over sexual misconduct complaints
Lunar new year
Celebrations begin on Thursday to mark the year of the Ox, with many Covid-19 restrictions in place.
Normally over the holiday, which is also known as the Spring Festival, tens of millions of migrant workers return home to celebrate with their families, but the transport ministry forecasts a total of 1.15bn trips this year, compared with 3bn in 2019.
Measures to discourage movement included cash gifts, additional streaming gigabytes and free entry to local tourist attractions. Employers have also warned workers that leaving town will be frowned upon, while some local authorities have barred entry to outsiders.
This has left many workers available for shifts and Chinese factories have pressed employees to keep working over the holiday as the country’s booming export businesses rush to keep pace with global demand.
Apple suppliers including Foxconn, Pegatron and Luxshare are offering workers bonuses and overtime over the holiday, while other exporters in China have pointed to higher orders and travel restrictions disrupting the country’s most important festival.
Kosovo elections
Kosovo goes to the polls this coming Sunday in an early parliamentary vote that could be decisive in attempts to reach a normalisation deal with Serbia and secure the country a UN seat.
Kosovo’s acting president, Vjosa Osmani, set the date for the snap ballot after a decision by the country’s top court to annul the June parliamentary vote to elect the new government.
Appearances
Bank of England governor Andrew Bailey faces the Treasury select committee on Monday to answer questions about his failure to protect investors in the collapsed London Capital & Finance fund while he was chief executive of the UK Financial Conduct Authority
ECB president Christine Lagarde is set to discuss the bank’s annual report at the European Parliament on Monday
Federal Reserve chair Jay Powell is due to speak on Wednesday at a webinar event hosted by the Economic Club of New York
German chancellor Angela Merkel will discuss the extension of coronavirus curbs with other EU state premiers on Wednesday
Earnings reports
Investors will be keen for updates on the Covid-19 vaccine developed by AstraZeneca and Oxford university when the pharma giant reports full- year results.
A study has found the jab does not appear to offer protection against mild and moderate disease caused by the viral variant first identified in South Africa. The group’s drug pipeline will also be of interest after some cancer and respiratory drugs gained approval.
UK online food retailer Ocado reports final results after raising its profit guidance several times last year.
Coronavirus restrictions drove online shopping over the festive season, with sales at its supermarket arm Ocado Retail, a joint venture with Marks and Spencer, increasing 35 per cent to almost £580m in the 13 weeks to November, the final quarter of its financial year.
Uber Technologies is likely to report revenue losses after the ride-sharing business has struggled in lockdowns. Investors will be on the watch for any commentary on profitability and sales in its Eats business. Rival Lyft is also expected to post revenue falls.
The global semiconductor chip shortage that has led carmakers to cut production will be in focus when General Motors reports. Rival Ford Motor said the shortage could hit profits by as much as $2.5bn when it reported last week.
Disney reports as theme park operations continue to struggle during the pandemic. User numbers at the fast-growing digital platform Disney will be closely watched too.
The outlook looks bleak for tour operator Tui, which has slumped to a €3bn loss after the pandemic forced it to slash its holiday and cruise itineraries and seek emergency aid from the German government.
Networking equipment company Cisco Systems is expected to report a fall in revenue.
User growth will be in focus when Twitter reports after numbers disappointed in the third quarter. Revenues are expected to rise after advertisers resume spending on digital advertisements with the partial return of sports and other live events.
Coca-Cola reports its fourth-quarter results after it last year declined to provide a financial outlook for investors, saying that consumption trends were impossible to predict with lockdowns being reintroduced. Closure of bars and restaurants are expected to hit revenues.
Key reports
Monday
KKR; SoftBank
Tuesday
Centene; Cisco Systems; S&P Global; DuPont; Twenty First Century Fox; Twitter; Willis; Ocado; Nissan Motor; Royal Mail Group
Wednesday
Coca-Cola; Uber; Applied Materials; Equifax; General Motors; Heineken; Deutsche Börse
Thursday
AstraZeneca; Brookfield Asset Management; Duke Energy; Illumina; Kraft Heinz; Walt Disney; Kellogg; Tyson Foods; VeriSign; PepsiCo; Zurich Insurance; Crédit Agricole; UniCredit; Expedia; Commerzbank; Tui
Friday
Dominion Resources; Moody’s; Asahi
Central banks and economic data
Investors will be watching to see if the European Commission cuts its forecast for the eurozone economy this week, having predicted in November that it would grow 4.2 per cent this year and 3 per cent next year.
Inflation remains in focus around the globe and we have several key updates this week.
US consumer price data for January will help investors gauge how the rise in coronavirus cases and the reimposition of lockdown measures has weighed on the country’s economic recovery.
Analysts forecast a month-on-month increase of 0.4 per cent, the same level as December, with the year-on-year rate fractionally higher at 1.5 per cent, according to forecasts compiled by Bloomberg.
China’s inflation reading for January is expected to show the country’s consumer price index turning negative for the second time in three months.
Economists polled by Bloomberg predict a drop of 0.1 per cent year on year, compared with a rise of 0.2 per cent in December. Sluggish prices have come despite a rapid recovery from the coronavirus pandemic, suggesting consumer demand is yet to fully bounce back.
Economists also expect China’s January producer price index, a measure of factory gate prices, to return to positive territory. The gauge has been negative in every month since January last year but is expected to rise 0.3 per cent year on year.
India’s CPI data for January will show whether inflation stayed inside the central bank’s target range for a second month.
Little is expected in the way of policy changes from the week’s central bank meetings, though inflation is again likely to feature predominantly when it comes to commentary from policymakers.
The first print of UK fourth-quarter GDP is out at the end of the week, with 0.5 per cent growth forecast, though this is expected to reflect the last gasp of activity before the last wave of lockdowns slowed the economy again.
Investors will pay attention to the UK RICS house price balance. Property held its own throughout 2020, but there are signs that resilience is fading.
In the eurozone, the week’s main releases are industrial production data for France and Germany.
Key data and events
Monday
Germany, industrial production (Dec)
Taiwan, trade balance (Jan)
Wednesday
Mainland China, CPI and PPI (Jan)
France, industrial production (Dec)
US, consumer price index (Jan)
Sweden; Hungary, rate decisions
Thursday
UK, RICS house price balance (Jan)
Malaysia, GDP (Q4)
Philippines; Mexico; Peru; Uruguay, rate decisions
Friday
UK, gross domestic product (Q4, flash)
US, Michigan Consumer Sentiment Index (Feb, flash)
Russia, rate decision
When central bank meetings run for more than one day they are listed on the date the meeting concludes and policy is announced
Additional reporting by Elena Losavio
Source: Economy - ft.com
