Week Ahead

The spotlight will be taken by inflation data from the US, China, India, and Brazil and US retail sales and consumer confidence. Other important releases include US, Eurozone, India and Mexico factory production numbers, Japan current account and producer prices, and Australia trade balance and retail sales. Also, the Bank of Korea will be deciding on monetary policy.

It is a relatively busy week ahead in the US. The consumer price report for December will probably show the inflation rate jumped to 7.1 percent, its highest since June 1982 and well above the Federal Reserve’s target of about 2 percent, raising expectations of a sooner-than-expected interest rate hike by US policymakers. At the same time, the preliminary estimate of Michigan consumer sentiment for January will likely show a slight deterioration in confidence among households. Elsewhere, retail sales and industrial production numbers for December are seen pointing to a small contraction in domestic trade and easing factory activity growth. Other publications to watch for are producer and foreign trade prices, business inventories, IBD/TIPP economic optimism index, the government’s monthly budget statement, and the final reading of wholesale inventories.

Elsewhere in America, important data to follow include Mexico industrial output and gross fixed investment; Brazil inflation rate, retail trade and business morale; Argentina consumer prices; and Peru unemployment rate.

In Europe, the UK will publish monthly GDP figures, alongside manufacturing production, construction output and foreign trade. Elsewhere, Germany’s preliminary estimate of 2021 GDP should point to a 2.7 percent growth, as Europe’s largest economy recovered from the health crisis that caused it to suffer the worst economic contraction since the 2008/2009 financial crisis last year. Other economic data includes: Eurozone unemployment report, balance of trade and industrial production; Germany wholesale prices; France, Spain and Poland inflation updates; and Turkey jobless data and industrial activity.

In the Asia-Pacific region, China will be publishing inflation and foreign trade data for December, with markets pointing to easing price pressure and solid export and import growth rates. Meanwhile, Japan is releasing data on current account, producer prices, Eco Watchers Survey Outlook and leading economic indicators. In Australia, investors will turn their attention to foreign trade figures, as well as the preliminary readings of both retail sales and building permits. Other highlights include: India consumer and wholesale prices, and industrial production; the Philippines trade balance; Malaysia industrial output; South Korea jobless rate; and New Zealand building permits. The Bank of Korea will be deciding on interest rates on Friday.