In the search for timely signals about recession risk in the US, the quarterly GDP releases are of limited value. The data is published with a considerable lag, is subject to hefty revisions, and suffers from low frequency (quarterly rather than monthly). But not all corners of the GDP report are created equal for analyzing the business cycle. Indeed, when it comes to searching for clues about the state of the economy, gross private domestic investment tends to be more sensitive to the ebb and flow of the macro trend vs. headline GDP data or personal consumption expenditures (PCE).
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● Ceasefire agreed for eastern Ukraine after Minsk summit | Reuters
● I.M.F. Approves $17.5 Billion Bailout for Ukraine | NY Times
● Sweden Cuts Rate, Announces Bond-Buying Program | WSJ
● US mortgage applications begin Feb with a drop | FT
● Eurozone Industrial Output Remains Flat In December | RTT
● German inflation falls 0.4% in Jan, biggest drop since 2009 | Europe Online
● Bank of England inflation report: UK inflation rate will go negative | City AM

US retail sales are expected to rise 0.2% in tomorrow’s January report vs. the previous month, according to The Capital Spectator’s median point forecast for several econometric estimates. The median prediction reflects a rebound vs. the previous month’s 0.9% decline.
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The US economy remains on a growth track, according to a markets-based estimate of the macro trend. The Macro-Markets Risk Index (MMRI) closed at +7.9% yesterday (Feb. 10). The benchmark’s readings in the roughly 5%-to-9% range so far in 2015 implies that business cycle risk remains low. A decline below 0% in MMRI would indicate that recession risk is elevated; readings above 0% imply that the economy will expand in the near-term future.
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● US job openings hit highest level since 2001 | MarketWatch
● US Small Business Optimism Slips From 8-Year High In Jan | 24/7wallst
● US Q4 Growth Estimates Falling After A Strong 6-Mo Stretch | WSJ
● Plosser says Fed does not fully understand low U.S. yields | Reuters
● Greek PM easily wins confidence vote, EU showdown looms | Reuters

Is there a shift of leadership underway? The weakness in US utility stocks in the last two trading sessions has conceded the top spot to healthcare companies for the trailing 252-day (1 year) period. Meanwhile, energy stocks appear to be stabilizing after a wave of selling that battered the sector in recent months.
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● UK Industrial Production Falls In December | RTT
● China January inflation hits five-year low | Reuters
● France’s industrial production rebounds, up 1.5% | MarketWatch
● Italian Industrial Production +0.4% in Dec vs. +0.1% forecast | Investing.com
● Conference Board US Employment Trends Index Increased in January | CB
● IMF predicts India will grow faster than its BRIC counterparts | Globe & Mail
● Oil falls as IEA warns that crude stocks may hit all-time high | Reuters

Maybe, but the current pace of wage increases for workers in the US–even after the pop reported in January’s payrolls data–still implies inflation at a rate that’s well below the Fed’s 2% target. Nonetheless, analysts are becoming more confident that the latest round of employment numbers boosts the odds that the Fed will begin raising interest rates later this year, perhaps as early as June.
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● German 2014 Trade Surplus At Record High | RTT
● Germany Posting Record Surplus Gives Fodder to Economy’s Critics | Bloomberg
● Now’s not the time to raise US interest rates | WaPo
● Euro zone sentiment improves sharply in Feb on ECB bond-buying | Reuters
● China’s Exports Post Surprise Drop in January | WSJ
● Get ready for Greece to leave euro, says Greenspan | Telegraph
● Bank of England set to make its first deflation forecast | The Times

● Climate Shock: The Economic Consequences of a Hotter Planet
By Gernot Wagner & Martin L. Weitzman
Summary via publisher (Princeton University Press)
If you had a 10 percent chance of having a fatal car accident, you’d take necessary precautions. If your finances had a 10 percent chance of suffering a severe loss, you’d reevaluate your assets. So if we know the world is warming and there’s a 10 percent chance this might eventually lead to a catastrophe beyond anything we could imagine, why aren’t we doing more about climate change right now? We insure our lives against an uncertain future–why not our planet?
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