Main Macro Events This Week
Politics will remain omnipresent near term, but economic data and monetary policy will be back in view. There are policy meetings from the FOMC, BOE and BoJ, though they should be uneventful. While it can be debated whether Trump’s bombastic force was the catalyst for the burst in animal spirits, it’s a fact that the Dow is 9.6% higher since Election day, and has crossed the 20k barrier for the first time ever. The German Dax is up a mighty 12.7%, while Japan’s Nikkei has risen an impressive 13.4%. Even the FTSE is up 7.2% despite worries Brexit would cause a crash. Consumer and business sentiment indicators (including PMIs) from around the world have increased measurably. The FOMC meets for the first time this year. There’s no press conference or release of estimates this time, so the focus will be exclusively on the policy statement. No one anticipates any action at this point, but we’ll be looking for clues on the timing of the next rate hike.
United States: This week’s heavy data slate is loaded with key releases, headlined by Friday’s January nonfarm payroll report. Jobs are forecast rising 190k after the disappointing 156k December increase. The unemployment rate is seen steady at 4.7%, while earnings should rise 0.3%. Income and consumption for December (Monday) will be closely monitored as it a gauge of potential consumer spending. Q4 employment costs (Tuesday) are seen posting a 0.6% pace of growth the same as in Q3. January consumer confidence is projected at 114.0 (median 113.0) from 113.7 in December. Also due this week are manufacturing (Wednesday) and services (Friday) ISMs. Each is expected to be unchanged. January vehicle sales will be awaited, along with the ADP private employment survey (both Wednesday).
This week’s earnings news could also help support the bullish tone in equities. Positive news from industrials, financials, tech, and IT helped propel the Dow to 20k and the S&P to 2,295. About one-third of the S&P has reported so far, (68% have beaten estimates). Tuesday has Apple, Pfizer, Exxon, UPS, and Sprint. On Wednesday, there is Facebook. Thursday includes Amazon, Visa, ConocoPhillips, Royal Dutch Shell, Merck, GoPro, and Philip Morris.
Canada: November GDP (Tuesday) will be important for the global growth outlook. Also of note is the December industrial product price index (Tuesday). Governor Poloz (Tuesday) speaks at the University of Alberta School of Business, which will be followed by a press conference.
Europe: The frenzy of data releases this week is likely to add to Draghi’s problems as the recovery continues, while inflation is jumping higher and could even top the ECB’s 2% limit in Germany. The week starts with German inflation data (Monday), where we see headline HICP rising to 2.1% y/y with overall Eurozone number (Tuesday) at 1.6% y/y. A major difficulty is that the divergence across countries is rising again. Preliminary readings for Q4 GDP are expected to be relatively robust, with overall Eurozone GDP growth is also expected to have improved to 0.4% from Q3’s 0.3%. At the same time, confidence indicators for January have generally shown that the recovery continues, and the final manufacturing and services PMI readings are expected to be confirmed at 55.1 and 53.6 respectively. However, the decline in German jobless numbers is likely to have slowed at the start of the year. The data calendar also has German and Eurozone retail sales, as well as French consumer spending data for December, along with December Eurozone PPI. Events include ECBspeak from Draghi, Praet, Coeure, Nowotny and Mersch among others.
UK: The BoE’s Monetary Policy Committee conducts their February meeting this week (announcement Thursday), and publishes its latest quarterly Inflation Report (also Thursday). Expectations are widespread for the nine members to vote unanimously for unchanged policy, which would leave the repo rate at its historic low of 0.25%, and leave the prevailing QE total unchanged. The minutes and inflation report are expected to convey a continued wait-and-see stance. The data calendar is heighted by January Gfk consumer confidence (Tuesday), expected to dip to -8 from -7 December. There’s also the monthly lending data from the BoE (Tuesday), and the January PMI surveys, starting with Wednesday’s manufacturing report and concluding with Friday’s services report, with construction due Thursday.
China: New Year Holidays until Thursday however, the official CFLP PMI (Wednesday) is expected to dip to 51.1 from 51.4. The Caixin/Market index (Friday) is projected falling to 51.5 from 51.9.
Japan: The BoJ begins its 2-day meeting (Monday). No change in policy is expected. December retail sales (Monday) up 1.7% y/y overall. Tuesday’s calendar is full unemployment is expected unchanged at 3.1%, December personal income and PCE are on tap too,. December industrial production, housing starts and construction orders are also due. January manufacturing PMI (Wednesday) is seen slipping to 52.3 from 52.4, and January auto sales are also due Wednesday. Thursday has January consumer confidence, which is forecast to dip to 43.0 from 43.1. The services PMI is due Friday. The minutes to the December BoJ meeting are also out on Friday.
Australia: Trade report (Thursday), expected to reveal an A$2.2 bln surplus. Building approvals (Thursday) are seen 3.0% firmer in December after the 7.0% gain in November.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our latest webinar and get analysis and trading ideas combined with better understanding on how markets work.
Click HERE to register the next webinar will start in:
Senior Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.