Week Ahead

Market volatility is expected in the coming week as Britain finally leaves the EU, while monetary policy decisions from the Fed and the Bank of England are also awaited. Other notable publications are US Q4 GDP growth, personal income and outlays, and durable goods orders; UK Gfk consumer confidence; Eurozone Q4 GDP figures, business survey and inflation rate; China NBS PMIs; Japan consumer morale, retail trade and industrial output; and Australia Q4 inflation and NAB business confidence.

The US Federal Reserve will probably hold interest rates at current levels when it meets on Wednesday, with investor focus turning to Fed Chair Jerome Powell’s press conference for further details about future policy steps. Regarding the US economic calendar, the advance estimate of fourth-quarter GDP will be keenly watched, as well as personal income and outlays, PCE price index, durable goods orders, employment cost index, new and pending home sales, Dallas Fed Manufacturing Index, Chicago PMI, Case-Shiller home prices, advance estimates of wholesale inventories and goods trade balance, and the final estimate of Michigan consumer sentiment.

On the corporate side, a new round of quarterly earnings kicks off with investors awaiting reports from big tech firms including Apple, Facebook, Alibaba, Microsoft and Amazon.

Elsewhere in America, key reports to keep an eye on include Canada monthly GDP and producer prices, Mexico fourth-quarter GDP, and Brazil unemployment rate.

The UK is leaving the European Union on January 31st, more than three-and-a-half years after voters decided to do so in a referendum held on June 23rd, 2016. Brexit was first due to happen in March 2019 under PM Theresa May, but it was delayed twice after Parliament rejected her deal, pushing the date to October. Meanwhile, Boris Johnson replaced Theresa May as PM in July and was forced to seek a third extension as the parliament failed to pass a revised Brexit deal into law. After calling for an early general election to end the Brexit deadlock, the new PM finally got the support needed to clear the path for Brexit. The European Parliament plenary will vote for the EU-UK Withdrawal Agreement next Wednesday and is also expected to approve Britain’s withdrawal terms. In addition to Brexit, Mark Carney will chair his last policy meeting as Bank of England governor on Thursday. Policymakers are seen holding rates, but persistent weak data suggest an interest rate cut is still on the table. The Gfk consumer confidence will also be in the spotlight, alongside monetary indicators, CBI Distributive Trades and Nationwide housing prices.

Elsewhere in Europe, important data include: the Eurozone fourth-quarter GDP figures, business survey, inflation and unemployment rates, and monetary indicators; Germany Ifo business climate, Gfk consumer confidence and retail trade; Switzerland KOF leading indicators, retail sales and trade balance; and Turkey industry morale and foreign trade.

In China, the NBS will be releasing its manufacturing and non-manufacturing PMI surveys, with forecasts pointing to a stabilization in the manufacturing sector. Meanwhile, the Bank of Japan will publish the summary of opinions from board members, following a growth forecast upgrade at its last policy meeting. On the economic data front, important releases for Japan include retail sales, industrial production, consumer confidence, unemployment rate, Tokyo inflation and housing starts.

Meanwhile in Australia key data include Q4 consumer price inflation, NAB business confidence, Westpac leading index, and private sector credit. Other highlights for the Asia-Pacific region include: South Korea consumer and business morale, industrial production and foreign trade; New Zealand and Hong Kong trade balance data; Vietnam trade, inflation, industrial output; Thailand industrial production; Singapore unemployment rate; and India public budget deficit.

Categories: Schekman

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