Week Ahead

The US economic calendar will be dominated by the inflation rate, producer prices, retail sales, and several speeches by Fed officials. Also, CPI, retail sales, and labour data will be released in the UK. Elsewhere, investors will follow Q4 GDP growth rates for Japan, Thailand, and the Netherlands; fresh inflation rates for India, Switzerland, and South Africa; and interest rate decisions in the Philippines and Indonesia.

The upcoming week will be crucial on the economic data front, as market participants will be eyeing the Labor Department’s January CPI and PPI index. The headline inflation is likely to have risen 0.5% month-on-month in January, the most since June 2022, but still resulting in the annual rate slowdown to 6.2% from 6.5%. Core CPI is expected to grow 0.4% over the previous month, bringing the annual rate to 5.5%. At the same time, economists forecast producer prices to rebound 0.4% month-on-month in January, resulting in a yearly rate of 5.4%. Also, retail sales will take a central stage with forecasts pointing to a 0.9% month-on-month gain after two consecutive periods of decline. Other releases to follow include building permits, housing starts, industrial production, the Philadelphia Fed manufacturing index, and import and export prices. Finally, after this week’s hawkish remarks on the interest rate path from several Fed policymakers, traders will pay close attention to the outlook given by Cleveland Fed president Loretta Mester and St. Louis Federal Reserve President James Bullard. On the earnings front, Coca-Cola, Cisco Systems, and Deere & Company are the most prominent companies to report.

In the United Kingdom, investors await key reports on jobs, inflation, and retail sales. Consumer prices are projected to decline 0.4% month-over-month for the first time in a year, pushing the annual inflation to a 4-month low of 10.2%. Meanwhile, the unemployment rate is seen unchanged in Q4, and retail sales are set to post a third consecutive monthly fall in January. Elsewhere in Europe, second estimates are likely to confirm that the Euro Area economy recorded a marginal 0.1% GDP growth in Q4, the weakest since early 2021. Other countries, including Netherlands and Poland, will publish preliminary Q4 GDP figures. Additional data to follow includes the Eurozone balance of trade, current account, and industrial activity; Germany wholesale prices; Russia 2022 GDP data; Switzerland inflation rate and industrial production.

It will be a busy week in Japan, as preliminary GDP figures are set to reflect an economic activity rebound in the last quarter, led by private consumption and net trade. The Japanese economy is expected to expand by 0.5% on the quarter, pushing the annualized rate to 2%. Core machinery orders and trade data are also due, with export growth seen slowing sharply. In India, consumer and wholesale inflation will be in the spotlight, with retail inflation seen accelerating to 5.9% from 5.7% and the WPI seen slowing to 4.5% from 4.95%. In China, the PBoC will announce its one-year Medium Term Lending Facility (MLF) interest rate. Elsewhere, both the Bank Indonesia and the Bangko Sentral ng Pilipinas are estimated to keep key interest rates steady. It is also worth monitoring the final GDP growth figures and trade data for Singapore and the exports and imports for Indonesia.

In Australia, all eyes will be on January employment data. Australia’s economy is anticipated to have added 20K jobs, recovering from a 14.6K loss in December but leaving the unemployment rate steady at 3.5%. On top of that, the Westpac consumer confidence and the NAB business confidence will be released.