On Monday 22nd: No major news.
On Tuesday 23rd: The Australian NAB Business Confidence is released, the Bank of Japan meets for its first monetary policy meeting of the year, and the quarterly inflation numbers of New-Zealand is due.
On Wednesday 24th: The PMI figures for France, Germany, the EuroZone, the UK, and the US are released and the Bank of Canada meets for its first monetary policy meeting of the year.
On Thursday 25th: The German Ifo Business Climate is released, the European Central Bank meets for its first monetary policy meeting of 2024 and the US monthly Durable Good Orders and the US quarterly GDP growth rate data is due.
On Friday 26th: The German GfK Consumer Confidence is released with the US monthly Core PCE index, Personal Income and Personal Spending figures.
Weekly outlook
We are entering an active week with significant economic figures and key speeches that could offer additional insights into the monetary policy paths of central banks. Investors will have three central banks meetings to monitor: the Bank of Japan, the Bank of Canada, and the European Central Bank. Additionally, major companies are set to release their earnings reports, adding to the overall market activity and volatility, further influencing investor sentiment.
Monday 22nd of January
Major Earnings Releases:
● United Airlines Holdings
● Timberland
Tuesday 23rd of January
In November 2023, Australia's NAB business confidence index experienced a second consecutive monthly decline, reaching -9 and approaching its lowest level since 2012. Business conditions also saw a downturn, hitting their lowest point since early 2022, with reductions in both sales (13 in November vs 19 in October) and profits (6 vs 11). Despite these challenges, employment remained stable at 8. Analysts anticipate a further decline in the December 2023 confidence index to -7 when the data is released at 12:30 AM GMT.
During its first meeting in 2024, the Bank of Japan (BoJ) is expected to reaffirm its projection for inflation to stay near the 2% target in the coming years. The BoJ is also anticipated to maintain its ultra-loose monetary policy when the data is released at 3:00 AM GMT, keeping the key short-term interest rate at -0.1%, maintaining 10-year bond yields around 0%, and setting the upper band at 1% for the long-term government bond yield.
The Consumer Price Index (CPI) experienced a 1.8% increase in the third quarter of September 2023, following a 1.1% rise in the previous quarter. This upward movement was primarily driven by the transport sector and housing and household utilities, with the latter being the second-largest contributor to the quarterly change. Analysts predict a 0.3% inflation for the quarterly data of Q4 2023 that will be released at 9:45 AM GMT.
Major Earnings Releases:
● Procter&Gamble
● Netflix
● Texas Instruments
● General Electric
● 3M
● Halliburton
● Logitech
Wednesday 24th of January
Investors will closely watch several Flash PMI figures today, particularly for France, Germany, the EuroZone, the UK, and the US, with releases scheduled between 8:15 AM GMT and 9:30 AM GMT for the European countries and 2:45 PM GMT for the United States.
Remember that PMI flash figures, or Purchasing Managers' Index flash figures, represent preliminary or initial estimates of the PMI for a given month. The PMI serves as an economic indicator offering a snapshot of the economic health of the manufacturing and services sectors in a specific country, relying on survey responses from purchasing managers in these sectors.
Here are the data by country with previous / forecast:
France:
● Composite: 44.8 / 45.4
● Manufacturing: 42.1 / 43
● Services: 45.7 / 46.4
Germany:
● Composite: 47.4 / 48.5
● Manufacturing: 43.3 / 44.6
● Services: 49.3 / 49.7
Euro Zone:
● Composite: 47.6 / 48
● Manufacturing: 44.4 / 45
● Services: 48.4 / 49.4
United Kingdom:
● Composite: 52.1
● Manufacturing: 46.2 / 47
● Services: 53.4
United States:
● Composite: 50.9
● Manufacturing: 47.9
● Services: 51.4
The Bank of Canada is set to meet for its first Monetary Policy meeting of 2024, and the Decision Statement is scheduled for release at 3:00 PM GMT. Following three consecutive months of maintaining its target overnight rate at 5% in the December meeting, the BoC is anticipated to keep its borrowing costs at a 22-year high. Officials project inflation to reach 2.5% by the conclusion of 2024 and 2% by the conclusion of 2025.
Major Earnings Releases:
● Tesla
● SAP
● IBM
● AT&T
● Seagate
● Alstom
● Louis Vuitton
Thursday 25th of January
Following a two-month consecutive increase in November 2023, the Ifo Business Climate index for Germany retreated to a three-month low of 86.4 in December 2023. This decline was attributed to growing pessimism among companies regarding both their current business situation and expectations for the upcoming months. Analysts predict a rebound to 87.5 in January, with the new data set to be released at 9:00 AM GMT.
Christine Lagarde's statement in Davos suggested that a decline in borrowing costs is unlikely before the summer, later than market expectations. Despite this, the European Central Bank (ECB) recognizes advancements in reducing inflation. No changes are anticipated for the January meeting, maintaining the interest rate on the main refinancing operations (MRO) at 4.50%, the rate on the deposit facility at 4%, and the rate on the marginal lending facility at 4.75%.
New Durable Goods Orders in the US fell 5.1% month over month in October, reversing a 4% increase in September. It was the second-largest drop in durable goods orders since April 2020, owing mostly to lower demand for transportation equipment. But the month of November showed an impressive gain of 5.4% (the largest since July 2020). Analysts expect a lower increase for December at 0.5% when the results are published at 1:30 PM GMT.
The US is also due to announce its first version of GDP data for the fourth quarter of 2023 at 1:30 PM GMT. After 4.9% in Q3 2023, the highest growth rate since the Q4 2021, analysts expect a slowdown at 2.3%.
Major Earnings Releases:
● Visa
● Intel
● T-Mobil
● Starbucks
● Christian Dior
● STMicroelectronics
● Nokia
● Comcast
Friday 26th of January
After reaching -28.3 in November, -27.6 in December, and -25.1 in January, Germany's GfK Consumer Confidence Climate is anticipated to show further improvement, reaching -23 when the latest results are published at 7:00 AM GMT.
In October and November, Core PCE prices in the United States, the Federal Reserve's preferred inflation measure, experienced a 0.1% increase compared to the previous month, signifying a slowdown from the 0.3% gain observed in September. The data for December is expected to be released at 1:30 PM GMT, with forecasts indicating a further deceleration to 0%.
Personal income exhibited a 0.3% month-over-month increase in September and October, followed by a 0.4% rise in November. It is projected to marginally slow down to 0.3% in December when the data is released at 1:30 PM GMT.
Personal spending registered a 0.2% month-over-month increase in November and a 0.1% gain in October, following a 0.7% surge in September. No significant changes are expected when the data is released at 1:30 PM GMT.
Major Earnings Releases:
● Caterpillar
● American Express
● Colgate-Palmolive
● Volvo
● Remy Cointreau
● Superdry
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