Week Ahead

In the US, the spotlight will be taken by retail sales, producer price inflation, several housing indicators, and earnings reports for several big corporations. Also, fresh inflation data will be released for the UK, Japan, Canada, and South Africa and monetary policy meetings will be held in Japan, Norway, Malaysia, and Indonesia. Finally, investors will be waiting for Q4 GDP growth, Industrial production, and retail sales for China.

As January proceeds, investors look for more insights into the health of the world’s largest economy and the direction of the Federal Reserve’s interest rate hikes. The Bureau of Labor Statistics producer prices index will fuel the debate on whether inflation peaked or could still surprise on the upside. Producer prices are likely to decline 0.1% month-on-month, resulting in a slowdown of the annual inflation rate from 7.4% to 6.8%, the lowest reading since May 2021. The core producer inflation, on the other hand, must have risen 0.1% over the previous month, prompting the annual rate to ease from 6.2% to 5.9%. The upcoming week also features the retail sales report from the Commerce Department, with forecasts pointing to a 0.5% month-on-month decline and suggesting that tighter financial conditions continued to dent consumer spending. Building permits, housing starts, and existing home sales will offer further clues about the real estate market. Other releases include industrial production and the Philadelphia Fed Manufacturing Index. A slew of earnings reports will also provide info on corporate America’s performance against stubbornly high inflation and rising interest rates. Goldman Sachs, Morgan Stanley, Charles Schwab, Kinder Morgan, PNC, ProLogis, Netflix, P&G, and Truist Financial are the most closely watched companies.

Elsewhere in America, Canada will publish the December CPI report. The headline inflation is seen falling 0.5% month-on-month, driving the annual inflation rate to ease from 6.8% to 6.3%. Brazil is to publish the employment survey, with the jobless rate expected to drop to 8% in December, the lowest since January 2015.

It will be a busy week in the United Kingdom too; main releases cover inflation, the jobs report, retail sales, and consumer morale. The annual inflation rate likely slid to 6.3% in December, the lowest since March. Elsewhere in Europe, investors anticipate the ECB monetary policy meeting accounts. In December, the central bank raised rates by 50 bps and said the hikes would need to continue at a steady pace to tackle inflation. Also, updated CPI figures for December are likely to confirm inflation rate in the Euro Area and Germany fell to a 4-month low, while in Italy, it decreased to a 3-month low. Meanwhile, Germany’s ZEW economic sentiment index is set to improve further to an 11-month high. Other data to follow: Euro Area current account and construction output; Germany wholesale and producer prices; and Spain and Italy foreign trade data. On the monetary policy front, central Banks in Turkey and Norway will be deciding on interest rates.

In China, GDP data is expected to show that growth slowed sharply in the fourth quarter, in line with forecasts of a smaller industrial output growth in December. Investors also await retail sales, unemployment, and housing prices for more insights into the health of world’s second largest economy. In Japan, all eyes are on the BoJ’s monetary policy decision after the central bank signaled it would debate side-effects of own wider yield curve control. Other significant releases include the Japanese inflation rate and balance of trade for December. In Australia, a busy week of economic data releases will be headlined by Westpac consumer confidence gauges for the first month of the year, followed by labor market figures for December. In New Zealand, investors await December’s PMI data.