Week Ahead

The coronavirus situation around the globe will continue to dominate the headlines, as the number of infections continues to rise at record pace and several countries go back into lockdown. Elsewhere, the ECB will publish its monetary policy meeting minutes; while other important releases include US inflation data, retail sales and industrial output; UK monthly GDP; China inflation data and foreign trade; Germany 2020 full-year GDP figures; India industrial output and inflation data; and Japan current account and machinery orders.

It is a relatively busy week ahead in the US on the economic data front. The consumer price report for December will probably show inflation rate edging higher to 1.3 percent, still remaining well below the Federal Reserve’s target. At the same time, the preliminary estimate of Michigan consumer sentiment for January will likely show a slight deterioration in morale amid record COVID-19 cases and hospitalizations and current restrictive measures across the country. Elsewhere, retail sales and industrial production numbers for December are seen pointing to a decline in domestic trade and modest factory activity growth. Other publications to watch for are producer and foreign trade prices, business inventories, JOLTs job openings, IBD/TIPP Economic Optimism, NY Empire State Manufacturing Index, and the government’s monthly budget statement.

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

Across the Atlantic, the UK will be publishing monthly GDP data, alongside industrial production, construction output and foreign trade. Figure from the ONS will most likely show Britain’s economy contracted 4% in November as England went back into lockdown.

Elsewhere, investors will be waiting for the ECB monetary policy meeting accounts. In December, policymakers expanded the central bank’s pandemic emergency purchase programme by another €500 billion and extended it to at least the end of March 2022. Meanwhile, key data to follow include the Eurozone industrial production and trade balance; German 2020 full-year GDP figures, and wholesale prices; Spain industrial output; Italy retail sales and industrial production; the Netherlands, Sweden and Ireland inflation rates; and Turkey current account, industrial output and unemployment rate. Central banks in Poland and Serbia will be deciding on interest rates.

In Asia, China will be publishing inflation data for December, with markets pointing to a rebound in consumer prices from their first decline in 11 years the month before while producer deflation will probably ease. In addition, trade figures will provide an insight of the post-pandemic economic recovery, with exports and imports seen rising sharply in December. The country’s monetary indicators and house price index will also be in the spotlight.

Elsewhere, Japan is releasing data on machinery orders, current account, producer prices and Eco Watchers Survey Outlook. In Australia, investors will turn their attention to home loans and the final readings of both retail sales and building permits.

Other highlights include: India consumer and wholesale prices, and industrial production; South Korea jobless rate; Indonesia trade balance and consumer morale; and New Zealand building consents and food inflation. The Bank of Korea is seen keeping interest rates at record-low levels when it meets on Friday.