We have an inflation data laden week and a lot of speakers from various Central Banks.
We also have a slew of market information from the Chinese; which may explain the rather sudden change of heart towards COVID.
The past week has shown a recovery in risk assets, particularly the stock markets for multiple reasons: China opening up again, inflation easing in the States, a thus far Northern Hemisphere mild winter reducing reliance on energy. China re-opening was the initial mover of these markets so their figures on Tuesday will be keenly watched, that said these figures are historic but better numbers will give more optimism as the Chinese economy would be rebounding faster.
Not wishing to pour cold water on the risk rally but it is the beginning of the year and investment funds do have new money to apportion so this may be fueling the fire.
For the week ahead clearly inflation numbers will be viewed carefully to see if the reduction in the US CPI is mirrored elsewhere in the world.
After last months shock when the Japanese widened the bands on 10 Year government bonds and thereby would allow rates to rise the market may be much more wary of the BOJ tinkering without allowing the actual bank rate to rise; should this happen then expect another lurch lower in USD/YEN.
We also have at least 5 FED speakers this week and whilst the mantra of higher for longer rates is likely to be standard any deviations will be jumped on.
Indeed the USD had a rough week last week and that looks as though it will continue unless inflation turns upwards again.
Commodities had a good week as well particularly copper which rebounded some 7.5% on the back of investment but also on fears of shortages.
Date | Country | Figures | Expected | Previous |
January 17 | China | GDP Growth rate | 1.8% | 3.9% |
| China | Retail Sales | -7.8% | -5.9% |
| GBP | Unemployment | 5.8% | 5.7% |
January 18 | Japan | BOJ interest rate decision | -0.1% | -0.1% |
| GBP | Inflation Rate | 10.6% | 10.7% |
| USA | Retail Sales | -0.8% | -0.6% |
| USA | PPI | -0.1% | 0.3% |
| USA | FED Speakers |
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January 19 | USA | Initial Jobless Claims | 212K | 205K |
| Japan | Inflation Rate | 3.8% | 3.8% |
| GBP | Retail Sales | 0.4% | -0.4% |
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