Week Ahead

It will be a light week on the US economic calendar, with investor focus turning to flash Markit PMIs, existing home sales and corporate earnings. Elsewhere, flash PMI surveys for the UK, Eurozone, Japan and Australia will also be in the spotlight, alongside UK unemployment and wage data; Eurozone consumer confidence; and Japan trade balance and inflation rate. The PBoC, ECB and BoJ will provide an update on monetary policy, while traders will also keep an eye on WEF annual meeting that will take place in Davos.

Investors in the US will pay more attention to data, after Washington and Beijing signed the so called Phase One trade deal, following 18 months of tariff war. Notable publications are flash Markit PMIs, existing home sales, Chicago Fed National Activity Index and FHFA house price index. On the corporate front, the fourth-quarter earnings season is expected to continue with reports from big firms including Johnson & Johnson, Procter & Gamble, Intel, Comcast, Netflix, Texas Instruments, IBM, American Express, UBS, American Airlines, Abbott and Union Pacific.

Elsewhere in America, the Bank of Canada will probably leave interest rates unchanged when it meets on Wednesday. Other important releases include Canada inflation, retail trade and new housing prices; Mexico unemployment; and Brazil business confidence.

Across the ocean, world leaders, business executives and academics will gather in Davos, Switzerland, for the World Economic Forum annual meeting to discuss about sustainable development.

Meanwhile, the UK will be releasing jobs report, CBI factory orders and flash Markit PMIs. Britain’s private sector activity should rebound from December’s contraction, boosted by services expansion. Manufacturing, however, is likely to continue in contraction territory.

ECB policymakers will meet for the first time this year on Thursday to decide on monetary policy, but no changes are expected. Flash Markit PMI figures for the Eurozone, Germany and France will also be in the spotlight, with forecasts suggesting the bloc’s services activity growth slowed during January while the manufacturing sector contracted for a 12th month in a row. Traders also await the release of the Eurozone flash consumer confidence; Germany investor morale and producer prices; France business survey; Italy and Spain factory orders; and Turkey consumer confidence. The Norges Bank is seen holding interest rates at current levels on Thursday, while Poland’s central bank is due to publish its monetary policy meeting minutes.

The People’s Bank of China will provide an update on its new loan prime rate (LPR) on Monday, which was set at 4.15 percent on November 20th. Investors will also focus on foreign direct investment. Meanwhile, the Bank of Japan will probably leave interest rates at current levels; and will be releasing its quarterly outlook report, alongside the minutes of December’s monetary policy meeting. On the economic data front, important releases for Japan include inflation rate, trade balance and flash Jibun Bank PMIs. In Australia, investors will focus on flash CommBank PMIs, Westpac consumer confidence and employment figures.

Other key data for the Asia-Pacific region include: South Korea and the Philippines fourth-quarter GDP figures; Taiwan export orders, industrial output and retail sales; Hong Kong unemployment rate and inflation; Singapore industrial production and inflation; Thailand trade balance; Malaysia inflation; and New Zealand fourth-quarter inflation rate and Services NZ PSI. Central banks in Malaysia and Indonesia will decide on interest rates.

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