Forex Market

Events to Look Out for Next Week

Welcome to our weekly agenda, our briefing of all the key financial events globally. Inflation pressures and virus developments remain in focus. Energy prices continue to surge across world and will likely see headline rates continue to rise. Central bankers clearly are getting nervous and worried about the risk of second round effects, especially if Omicron and vaccination schedules really mean the end of the pandemic phase of Covid-19.  The week ahead is expected to be a massive one from a data perspective as Inflation, GDP and Retail Sales data and BoJ meeting will be the highlights for next week.

Monday – 17 January 2022

Gross Domestic Product (CNY, GMT 02:00) – GDP is the economy’s most important figure. Q4’s GDP is expected to slowdown at 3.6% y/y from 4.9% y/y.

Tuesday – 18 January 2022

Interest Rate Decision, Monetary Policy Statement & Outlook Report (JPY, GMT 03:00) –  The BoJ sits on its ZIRP policy for the foreseeable future. The Bank is set to taper corporate debt purchases to pre-pandemic levels and the emergency funding scheme scaled back once the March 2022 deadline is reached. Loan assistance for smaller businesses was extended another six months, while support for larger firms will be gradually scaled back from April. A very limited move towards normalization that leaves the BoJ far behind the Fed and failed to instill much confidence in markets.
Employment change & ILO rate (GBP, GMT 07:00) – UK the labour market looks increasingly tight with many companies struggling to find skilled staff. Reports suggest that pay bargaining across major private and public sector employers was relatively low through much of last year, likely also owing to the crisis situation. UK Earnings with the bonus-included figure were at 4.9% (3 mo/y) in the three months to November. The UK ILO unemployment rate is at 4.2%.
Economic Sentiment (EUR, GMT 10:00) – German January ZEW economic sentiment is expected to have rise to 32.0 compared to 29.9 in December.

Wednesday – 19 January 2022

Consumer Price Index (GBP, GMT 07:00) –That UK inflation is above target and will move up further with the official December readings out next week, is pretty clear. But the extent of price increases very much depends on which number one focuses, with a huge difference between the measures most frequently cited and used to incorporate cost of living changes in things like pension adjustments, charges for student loans and others. Unions still cling to the RPI as the “best measure” and that already stood at 7.1% in November, far above the CPI reading, which was “just” 4.6%. With the labour market looking increasingly tight, that adds to the risk of second round inflation effects.
Housing Stats & Building Permits (USD, GMT 13:30) – Housing starts are expected to ease to a 1.660 mln pace in December from rates of 1.679 mln in November and 1.502 mln in October, versus a 15-year high of 1.725 mln in March. Permits are expected to sit at 1.710 mln, versus 1.712 mln in November and a 15-year high of 1.883 mln in January.
Consumer Price Index and Core (CAD, GMT 13:30) – Canada’s CPI was steady at a 4.7% (y/y, nsa) pace in November from the 4.7% growth rate in October. CPI grew 0.2% (m/m, nsa) after the 0.7% gain in October. The average of the BoC’s three core CPI measures was 2.7% in November (y/y, nsa), unchanged from October. Both the total and core measures were in-line with expectations.
BOE Governor Bailey Speech (GBP, GMT 14:15)

Thursday – 20 January 2022

Employment Change (AUD, GMT 00:30) – Australian labor market expected to show a change to 30K employed people for December. The december unemployment rate is expected to decline slightly at 4.5% m/m from 4.6%.
Consumer Price Index and Core (EUR, GMT 10:00) – HICP inflation ended 2021 at 5.0% y/y, up from 4.9% y/y in November and hitting the highest since the start of the seriesHeadline inflation rates in the Eurozone for December are expected unchanged. At the moment there is a a slight correction at the 4.9% y/y with core at 2.6% y/y.
ECB Monetary Policy Meeting Accounts (EUR, GMT 12:30) – The ECB Monetary Policy Meeting Accounts provide information with regards to the policymakers’ rationale behind their decisions. The official line remains that a rate hike this year is very unlikely. Nevertheless, the fact that the central bank still adds net asset purchases for most of this year means there now is the risk of a more permanent inflation overshoot that could undermine confidence in the central bank’s inflation fighting credentials. At the same time, keeping spread in remains a key policy objective and that will increasingly test the ECB’s resolve this year and likely see the hawks getting more vocal.
Philadelphia Index (USD, GMT 13:30) – The Philly Fed index is seen rising to 19.0 in January after a big drop to 15.4 in December.
BoJ Monetary Policy Meeting Minutes (JPY, GMT 23:50) – The BoJ minutes should provide further guidance for 2022.

Friday – 21 January 2022

Retail Sales (GBP, GMT 06:00) – The Retail Sales are seen a slowdown at 0.8% m/m for December from 1.4% m/m with the core lower at 0.8% from 1.1% m/m last month.
Retail Sales (CAD, GMT 13:30) – The Retail Sales are seen at -0.5% December decline for the headline and -0.3% for the ex-auto measure, after November increases of 0.3% for both. The headline should be restrained by both a pull-ahead of holiday sales into early-Q4 due to feared supply shortages, and a headwind to holiday activity from the Omicron variant.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

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