Week Ahead

The fourth-quarter earnings season continues next week, with companies such as Bank of America, Goldman Sachs, Morgan Stanley, P&G and Netflix reporting their results. Elsewhere, central banks in Japan, China, Indonesia, Malaysia, Turkey and Norway will be deciding on monetary policy, while the ECB will be publishing meeting minutes. Other key data to follow include US housing starts and building permits; Canada, UK and Japan inflation data; China Q4 GDP figures; Eurozone consumer confidence; and Australia employment figures.
The US earnings season will gather pace next week with Bank of America, Goldman Sachs, Morgan Stanley, P&G, Netflix, United Airlines, American Airlines and Schlumberger due to report. Investors will be looking for corporate results for an update on how companies are handling rising costs for transportation, raw materials, wages and other expenses. S&P 500 earnings are expected to have increased by 22.4 percent year-on-year in the last three months of 2021, according to Refinitiv. On the data front, the NAHB index, housing starts, building permits and existing homes sales will provide more clues on the tight US housing market. NY Fed and Philly Fed manufacturing indexes will also be in the spotlight. Meanwhile, markets in the US will be closed on Monday for the Martin Luther King, Jr. Day.
Elsewhere in America, important data to follow include Canada inflation rate, retail sales, new house prices, housing starts, and ADP employment change, as well as Mexico jobless rate, Brazil monthly economic activity, and Argentina and Colombia trade figures.
Across the Atlantic, it is a particularly busy week ahead on the UK economic calendar, with main releases including inflation, the jobs report, retail sales, and consumer morale. Britain’s consumer prices likely accelerated further by 5.2 percent in December, a fresh high since September 2011 and retail trade is seen falling 0.6 percent, following two consecutive months of advances. The unemployment rate is expected to hold at the lowest level since mid-2020 and wage growth to slow further to a 12-month low.
Elsewhere in Europe, the ECB account of December’s policy meeting will be keenly watched, alongside the Eurozone flash consumer confidence and Germany’s ZEW economic sentiment index. Consumer sentiment in the bloc probably weakened to a 10-month low at the start of the year, while German investor morale likely increased to a five-month high. Other data to follow include: Euro Area final inflation data, current account and construction output; German producer prices; France business survey; Spain and Italy foreign trade data; and Turkey consumer confidence. Central Banks in Turkey and Norway will be deciding on monetary policy, but no changes are expected.
In Asia-Pacific, all eyes turn to China’s fourth-quarter GDP, alongside December’s industrial production, retail sales, unemployment rate, fixed asset investment and house price index. The GDP is expected to have grown 3.6 percent in the three months to December, the slowest pace since the second quarter of 2020, as the recovery in the world’s No 2 economy has been hit by several COVID-19 outbreaks, the most severe energy crunch in decades, and ongoing supply shortages. In addition, the People’s Bank of China will provide an update on its new loan prime rate (LPR) on Thursday, which was cut by 5 bps to 3.80 percent last month.
The Bank of Japan is expected to keep its policy interest rate at -0.1 percent when it holds a meeting on January 17-18. Key economic data in Japan include consumer price inflation, foreign trade and machinery orders. Meanwhile, investors in Australia will be waiting for employment figures, Westpac consumer confidence, HIA new home sales, and the final reading of building permits.
Other highlights for the region include: New Zealand Business NZ PMI and food inflation; Hong Kong unemployment and inflation rate; Taiwan export orders; Singapore non-oil exports; Thailand and Indonesia foreign trade figures; and Malaysia consumer prices. Central banks in Indonesia and Malaysia will also be deciding on interest rates.


Categories: Markten