Key US data coming up for the day ahead - Nomura

Analysts at Nomura offered their preview on today's US data for the US session ahead.

Key Quotes:

"Industrial production: 

In February, total industrial production (IP) rose just 0.1% m-o-m, but core factory output (ex-motor vehicles and parts) increased a strong 0.5%, suggesting a steady improvement in manufacturing activity. In March, we expect a 0.1% m-o-m decline in headline IP driven by weaker core factory output and auto assemblies (Consensus: 0.4%). Aggregate work hours in the core manufacturing sector declined notably, suggesting weaker activity in this sector. Moreover, industry data suggest vehicle production fell sharply over the month, creating an additional drag on headline IP. Yet, crude oil output and related support activity improved, while utility production likely rebounded strongly as March was colder than the prior two months. However, as core factory output and auto assemblies account for a lion’s share of total IP, the increases in mining and utilities output may not be enough to offset the drag from core factory output and vehicle assemblies. 

Housing starts: 

We forecast an 8.0% m-o-m decline in housings starts in March, slowing to an annualized rate of 1185k from 1288k in the prior month (Consensus: -3.0% to an annual rate of 1250k). We expect single-family housing starts to slow notably after a strong increase in February. In addition, based on incoming data, we expect the strong drag from multi-family housing starts to continue. Our forecasts take into account the weather in March, which was colder than usual. As the temporary boost from the two previous months of unusually warm weather dissipates, we expect some downward pressure on housing starts. Moreover, payrolls in the residential construction sector and related specialty trade contractors declined slightly in March, portending to some moderation in residential construction activity. Moreover, we expect an increase of 1.2% m-o-m for building permits in March, raising the annualized rate to 1230k from 1216k in the prior month (Consensus: 2.8% to an annual rate of 1250k). As noted, March was colder than January and February and residential construction-related employment was on the weak side. However, homebuilders’ sentiment remains highly elevated, pointing to some recovery in building permits, in our view."