The Top Events/Releases for next week - page 6
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1. U.S. Third Quarter GDP - Final Estimate
The U.S. is to release final figures on third quarter economic growth at 8:30AM ET (13:30GMT) Friday.
The data is expected to reveal that the economy expanded by 3.3% in the three months ended September 30, improving from a preliminary estimate of 3.2% and accelerating from growth of just 1.4% in the second quarter.
Reports on durable goods orders, home sales and personal spending will also be in focus, as investors attempt to gauge if the world's largest economy is strong enough to withstand further rate hikes next year.
2. BOJ Policy Announcement
The Bank of Japan's latest rate decision and monetary policy statement are due during Asian hours on Tuesday. BOJ Governor Haruhiko Kuroda will hold a press conference afterward to discuss the decision.
A Reuters poll showed on Friday that the Japanese central bank is expected to keep its negative interest rate unchanged at -0.1%, while maintaining the 10-year government bond yield target at around 0.0% as a weaker yen and positive overseas conditions augur well for Japan's economic prospects.
The poll also showed analysts expect the BOJ to maintain the net amount of Japanese government bonds it buys annually at around 80 trillion yen.
3. German IFO Business Sentiment
The Ifo German research institute is to report on German business sentiment at 09:00GMT (4:00AM ET) on Monday, with market players expecting the index to inch up to 110.7 this month, which would be the highest reading since April 2014.
The monthly index is based on a survey of around 7,000 German firms in the manufacturing, construction, wholesale and retail sectors.
4. U.K. Final Q3 GDP
The Office for National Statistics is to produce a third estimate on U.K. third quarter economic growth at 09:30GMT (4:30AM ET) on Friday.
The report is forecast to confirm the economy grew 0.5% in the July-to-September period, unchanged from a preliminary reading, indicating that the British economy shrugged off the immediate shock of the June 23 Brexit referendum.
On a year-over-year basis, the economy is forecast to grow by 2.3%, also unchanged from an initial estimate.
5. Canadian Growth Figures
Canada is to release monthly economic growth figures at 8:30AM ET (13:30GMT) Friday. The data is expected to show that the economy expanded 0.1% in October, after growing 0.3% a month earlier.
1. Christmas Vacation
Stock markets in Australia, New Zealand, Europe, the U.K., Switzerland, Canada and the U.S. will remain closed on Monday, to make up for Christmas Day falling on a Sunday.
Brits and Canadians get an extra day off for Boxing Day, so markets in those countries will also be closed on Tuesday.
2. U.S. December Consumer Confidence
The Conference Board, a market research group, is to publish data on December consumer confidence at 10:00AM ET (15:00GMT) on Tuesday, with market players expecting the index to rise to 108.5 from 107.1 a month earlier.
If confirmed it would be the strongest reading since July 2007.
3. U.S. Pending Home Sales for November
The National Association of Realtors is to release data on November pending home sales at 10:00AM ET (15:00GMT) on Wednesday. The report is expected to show pending home sales rose 0.5% last month, after inching up 0.1% in October.
4. U.S. Weekly Initial Jobless Claims
The U.S. is to release a weekly report on initial jobless claims at 8:30AM ET (13:30GMT) Thursday, amid expectations for an increase of 2,000 to 277,000 in the week ending December 23.
5. Japanese November CPI
Japan's Statistics Bureau will publish November inflation figures at 23:30GMT Monday (6:30PM ET). Market analysts expect the headline figure to remain negative, falling 0.4% year-on-year, which would be the 12th straight month of declines.
The country has been struggling to hit its 2% consumer price target, keeping pressure on the Bank of Japan to maintain its aggressive stimulus package.
1. US Employment Report
The latest US employment report is due for release on Friday January 6th at 08:30 EST.
The US employment report will set the immediate tone surrounding sentiment towards the US economy at the start of 2017 and will also have a significant impact on Federal Reserve expectations.
A firm reading for payrolls growth would increase expectations that the labour market remains very robust, while a disappointing reading would raise some doubts surrounding the outlook.
The unemployment rate will be important after the decline to 4.6% in the December report. Any further decline would increase speculation that the US economy is moving beyond full employment, which will tend to increase pressure for a tighter monetary policy to prevent overheating.
The average earnings data will also be important following the 0.1% decline last month. Another subdued report would dampen expectations that a tight labour market is putting upward pressure on earnings and this would also suggest a relatively limited risk of higher inflation.
In contrast, a sharp increase in earnings would increase expectations that last month’s data was distorted and that there will be sustained upward pressure on inflation during 2017 as earnings growth accelerates.
The Fed will be much more alert to overall inflation risks if there is strong upward pressure on earnings.
2. Federal Reserve Minutes
The Federal Reserve minutes will be released on January 4th at 14:00 EST.
Although there were no surprises with the interest rate decision, these minutes from December’s FOMC meeting will be very important for underlying market sentiment surrounding Federal Reserve policy.
The main market moving aspect of the Fed release was the increase in interest rate projections by the individual FOMC members with three rate increases expected for 2017 compared with the two expected at September’s meeting.
The overall statement was relatively cautious, but the ‘dot plots’ received most of the attention and boosted bullish dollar sentiment and pushed interest rates higher. If the minutes look to play down the potential for aggressive hikes during 2017, there will be the potential for a shift in market expectations, which will have an important impact on yields.
The emphasis within the minutes on inflation will also be very important for 2017 expectations.
Within the statement, there were no references to the international economy and the dollar. There are, however, important references to both elements in the minutes, which will be monitored very closely. In particular, commentary on the currency will be very important, especially given the impact on inflation expectations. Concerns over the dollar would dampen expectations of aggressive Fed tightening.
References to potential changes in fiscal policy and any impact on monetary policy will also be monitored closely within the minutes.
3. China PMI Data
The latest official China PMI manufacturing data is due for release on January 1st local time (20:00 EST Saturday).
The non-manufacturing data will be released at the same time and the Caixin manufacturing data is due for release on Monday January 2nd.
Underlying concerns surrounding the Chinese economic outlook have increased again with a particular focus on the yuan with expectations that capital outflows will put the currency under sustained downward pressure.
The PMI data will be important in determining near-term confidence surrounding the outlook. Any improvement would boost confidence that growth will be able to maintain momentum during the first quarter of 2017, which would help alleviate market fears.
A downturn in the PMI data would risk a serious erosion of confidence and concerns that there will be a repeat performance of 2016 when fears over the Chinese outlook triggered sharp declines in global equity markets.
The market reaction will inevitably be complicated by the fact that all major markets will be closed at the time of release, increasing the risk of sharp opening gaps.
4. UK Manufacturing PMI
The latest UK PMI manufacturing data will be released on Tuesday January 3rd at 04:30 EST.
The UK PMI data recovered strongly following an initial slump after the June EU referendum vote, but momentum tended to stall during the final quarter of 2016.
The December release will give further insight into underlying developments within the economy and the potential 2017 outlook, which will be important for monetary policy expectations.
Within the manufacturing release, the evidence on export trends will be particularly important, especially as companies have had time to respond to sharp Sterling losses. If export orders are disappointing, there will be concerns over structural weaknesses and the medium-term sustainable Sterling rate will be revised lower.
The inflation trends will also be important as the Bank of England continues its balancing act on inflation and growth trends. A further sharp increase in prices would make it more difficult for the central bank to maintain a policy of extremely low interest rates.
The construction and services releases are scheduled for release over the following 2 days.
5. Eurozone CPI Flash Inflation Estimate
The latest Eurozone CPI inflation data will be released on Wednesday January 4th at 05:00 EST.
Eurozone inflation data will be a very important focus during the year ahead given the impact on ECB policies and expectations.
The ECB maintained a notably downbeat tone surrounding inflation at the December policy meeting with inflation still not expected to meet the ECB target in 2019 with a forecast of 1.7%.
There will, however, be significant upward pressure on inflation at the start of 2017 from base effects given that prices fell significantly at the beginning of 2016.
A weaker Euro and increase in oil prices will also put upward pressure on prices and this combination will lead to a sharp upward pressure on the annual CPI rate with markets expecting a December rate of 1.0% from November’s 0.6% rate.
The Spanish CPI inflation rate, for example, increased to 1.5% for December from 0.7% in November and a strong increase in the Eurozone rate would fuel expectations that the ECB will have to scale back its aggressive monetary policy more quickly than expected.
1. U.S. Jobs Report for December
The U.S. Labor Department will release its December nonfarm payrolls report at 8:30AM ET (13:30GMT) on Friday.
The consensus forecast is that the data will show jobs growth of 175,000, following an increase of 178,000 in November, the unemployment rate is forecast to inch up to 4.7% from 4.6%, while average hourly earnings are expected to rise 0.3% after falling 0.1% a month earlier.
An upbeat employment report will point to an improving economy and support the case for higher interest rates in the coming months, while a weak report would add to uncertainty over the economic outlook and push prospects of tighter monetary policy further off the table.
Besides the employment report, this week's calendar also features U.S. data on manufacturing and service sector growth, construction spending, auto sales, weekly jobless claims, factory orders as well as monthly trade figures.
2. Fed FOMC Meeting Minutes
The Federal Reserve will release minutes of its December policy meeting on Wednesday at 2:00PM ET (19:00GMT).
The U.S. central bank hiked interest rates following its meeting on December 14, in a widely expected decision, and signaled it expects to raise interest rates three times in 2017, up from the two hikes predicted in September.
There are also several Fed speakers this week, with Chicago Fed President Charles Evans, Richmond Fed President Jeffrey Lacker and Dallas Fed President Rob Kaplan all speaking on Friday.
3. Chinese Manufacturing Data for December
The Caixin manufacturing index is due at 01:45GMT Tuesday (9:45PM ET Monday). The survey is expected to inch down to 50.7 from 50.9 in the preceding month.
The official manufacturing purchasing managers' index released on Sunday dipped to 51.4 in December from 51.7 in November, slightly below the forecast for 51.5.
Anything above 50.0 signals expansion, while readings below 50.0 indicate industry contraction.
The lack of momentum in manufacturing growth continues to worry investors heading into the new year, with the yuan’s record-setting slide versus the dollar in 2016 not seen to be providing much of a boost to the sector.
4. Euro Zone Flash December Inflation Figures
The euro zone will publish flash inflation figures for December at 10:00GMT (5:00AM ET) Wednesday.
The consensus forecast is that the report will show consumer prices rose 1.0%, compared to a rise of 0.6% in November, while core prices are expected to gain 0.8%, unchanged from the prior month.
A weaker euro and rising oil prices mean that projections the European Central Bank released less than a month ago could be revised higher in 2017.
Any sign of faster consumer-price gains could spur more-hawkish ECB officials to call for a gradual exit from monetary stimulus.
The ECB extended its bond-buying program for an additional nine months in December, even as it cut back on the size of asset purchases.
5. U.K. December PMI's
The U.K. will release readings on December manufacturing sector activity on Tuesday, followed by a report on the construction sector on Wednesday and the service sector on Thursday.
The manufacturing PMI is forecast to inch down to 53.3 from 53.4 a month earlier, construction activity is expected to improve slightly to 53.0 from 52.8, while a survey on Britain's giant services sector is forecast to dip to 54.7 from 55.2 last month.
The Bank of England kept monetary policy on hold last month and reiterated that policy can respond “in either direction” to the changes in the outlook.
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1. US Retail Sales
The latest US retail sales report is due for release on Friday January 13th at 08:30 EST.
Markets will be looking at short-term economic indicators closely to judge underlying growth trends and the likely Federal Reserve policy stance during the first half of 2017.
There was a sharp increase in consumer confidence in the December readings with the Conference Board indicator at the strongest level since 2001, although confidence surrounding the present situation actually deteriorated slightly on the month.
Markets will be looking at the retail spending data to judge whether the improvement in confidence has translated into stronger spending.
Reports from retailers suggest that spending in stores was relatively weak in December, but this is likely to have been offset by strength in other areas such as eating out.
There is the risk of seasonal distortions and a possibility that promotions in November undermined sales in December.
The latest PPI data will be released at the same time with the University of Michigan consumer confidence index due later in the day.
2. China Reserves
The Chinese currency reserves data is due for release over the weekend.
China’s data on December currency reserves is due for release over the weekend, although this could be delayed until Monday.
China’s economic policies, the yuan and capital flows will remain a very important short-term market focus, especially as there has been an increasing global impact.
The People’s Bank of China move to squeeze yuan shorts had an important impact triggering a wider reduction in long dollar positons during the current week.
A faster than expected pace of reserve depletion for December would increase fears over an increase in underling capital outflows and also risk increased instability surrounding Chinese capital markets. Heavy net outflows would also increase speculation over a faster pace of US Treasury selling by the People’s Bank of China, which would tend to push US yields higher.
A sharp decline in reserves would be likely to damage global risk appetite, while a more moderate pace of depletion would offer some short-term reassurance.
China is also due to release its latest trade data on Friday local time, which will have an important impact on confidence in the global growth outlook.
3. UK Prime Minister May Interview
UK Prime Minister May is scheduled to hold a TV interview on Sunday January 8th.
The UK Brexit debate will continue to have a very important impact on Sterling sentiment and will also have a wider impact on the Euro as the UK moves towards triggering Article 50.
The government remains under strong pressure to provide further guidance on its negotiating stance and objectives, especially after criticism of its stance by the out-going UK ambassador to the EU.
Markets will analyse May’s interview closely for hints on the likely shape of a Brexit stance. A confident stance from May and conciliatory rhetoric, which suggests that a negotiated settlement is achievable, would offer some support to Sterling and UK markets. An uncompromising stance on immigration would tend to undermine confidence in UK assets.
There will be the possibility of a significant opening gap for Sterling at the Asian open on Monday.
It is also possible that the Supreme Court ruling on whether parliament needs to be consulted on a triggering of Article 50 will be delivered in the week ahead. The outcome is likely to trigger a significant Sterling move.
4. Chicago Fed President Evans Speaks
Chicago Fed President Evans is due to speak on Thursday January 12th at 08:30 EST.
Evans is taking part in a panel discussion and any commentary on the economy and monetary policy will be watched closely.
Evans is one of the most dovish FOMC members and he is a voting member on the committee this year, which will ensure that his comments receive close attention.
In comments ahead of the December Fed meeting, Evans suggested that two interest rate increases would be appropriate in 2017.
Markets will be looking to calibrate any rhetoric against his baseline thinking from December and whether there is any shift in his stance on the risks of inflation staying too low. A more hawkish stance from Evans would reinforce expectations that the Federal Reserve will move towards more than two rate increases during 2017.
Any comments on fiscal policy and the potential policy response will also be important for policy expectations.
Comments from other Fed speakers will be closely monitored during the week with regional Presidents Lockhart, Bullard, Rosengren and Harker all due to make remarks.
5. UK Industrial Production
The latest UK industrial production data is due for release on Wednesday January 11th at 04:30 EST.
The UK production data will be important for market sentiment despite strength in the PMI data.
Last month’s data was much worse than expected with a 1.3% decline in industrial output. Although oil-field maintenance was partly to blame for the decline, there was also a significant decline in manufacturing output.
Overall PMI manufacturing data has been firm and the CBI industrial survey has been positive, but the official data has been generally negative with production having a negative impact on third-quarter GDP.
Overall, there will need to be a sharp monthly improvement in the data to alleviate underlying concerns surrounding the outlook.
The latest UK trade data will also be released at the same time.
Week Ahead: Waiting For Trump; Buy N-Term USD Dips
The recent minor stalling of the USD rally is corrective in nature, in our view, and the USD uptrend should resume before long.
Indeed, we suspect that investors may want to wait until after President Donald Trump’s inauguration before adding to their USD-longs. One risk to this view is that concerns may abound about a repeat of Q1 2016, when the aggressive USD rally fuelled fears about the sustainability of the EM USD debt and triggered a spike in global risk aversion. That development forced the Fed to turn more cautious and effectively killed the USD rally last March.
Any dovish shift at the FOMC in response to further tightening in the global financial conditions is less likely this time, in our view. What is different is that global economic data are improving and inflation gauges nudging ever closer to the central banks’ targets.
In addition, the Trump victory should continue to invigorate animal spirits in the US. A more hawkish Fed should magnify any potential spike in global risk aversion on the back of fears about the EM FX debt sustainability, too aggressive USD appreciation and growing US protectionism.
The USD remains buy on dips in the near term, and we expect the upcoming US data releases and the Fed speakers to encourage further convergence in the Fed and market rate expectations. We estimate that the closing of that gap should boost USD TWI by more than 2% over the medium term.
We continue to think that being short commodity currencies vs the USD, especially the AUD, is a good way to express both a more aggressive FOMC and concerns about US protectionism.
EUR/USD should remain close to the lows for now on the back of lingering political risks and growing divergence between the hawkish Fed and dovish ECB. EUR could continue to suffer against some G10 smalls as well. In particular, we suspect the EUR underperformance against Scandi currencies could grow next week ahead of Swedish and Norwegian CPI data.
In contrast, EUR/GBP could remain supported ahead of the UK data and next week’s Supreme Court ruling. We expect the court to rule in favour of greater parliamentary involvement in Brexit, which might limit the risks of a hard Brexit over the long term but could add to the political uncertainty in the interim, adding to the headwinds for the economy.
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Monday
Tuesday
Wednesday
Thursday
Friday
1. ECB Monetary Policy Meeting
The latest ECB monetary policy decision is due on Thursday January 19th at 07:45 EST.
Bank President Draghi will hold his regular press conference 45 minutes later.
The ECB minutes from December’s policy meeting revealed increased divisions within the Governing Council.
There was a debate over the two options to extend the bond-buying programme by 6 months at EUR80bn or EUR60bn for nine months with the latter winning out.
There were, however, members who opposed both options and there were other members who wanted a six-month extension at a lower rate.
There were some concerns that inflation would be higher than the staff projections, especially as the forecasts had not taken into account the OPEC production cuts.
The inflation debate is likely to be considerably sharper at this meeting, especially with a sharp rise in German inflation for the January data. There is a very little chance of a change in interest rates, but the press conference tone will be crucial for market reaction and internal ECB politics.
If bank President Draghi maintains a very dovish tone at the press conference, there will be a high risk of increased dissent within the council and unofficial briefings against Draghi.
2. US Presidential Inauguration
The inauguration ceremony for President-elect Trump will be held on Friday January 20th from 09:30 EST.
Inevitably, there will be huge coverage of Trump’s inauguration with a particular focus on the content of his speech.
Market attention will also be very high after the January 11th press conference, when the dollar fell sharply on a lack of rhetoric surrounding any fiscal stimulus and tax cuts.
Markets will again be looking closely for any hints on policy with a particular focus on fiscal and trade policies. Even if there are no specifics, there could be a significant market reaction.
The overall tone of the speech is also likely to be important as a conciliatory speech aimed at promoting unity would tend to support equity-market sentiment, while a more combative approach would tend to erode confidence, especially as there would be expectations of major friction with Congress.
3. US Consumer Prices
The latest US CPI report is due for release on Wednesday January 18th at 08:30 EST.
The US inflation trends will continue to be a key market focus during the next few months.
The Federal Reserve is expecting a gradual increase in inflation to the 2.0% target during the course of the year. The earnings data was stronger than expected in the December employment report and there will be expectations that higher earnings will put some upward pressure on inflation.
Stronger than expected data would increase pressure for the Fed to increase interest rates at the March FOMC meeting, while a more subdued release would give the FOMC more opportunity to assess developments.
Markets will be looking for any evidence of an impact from the strong dollar, although this is more likely to show up over the next few months.
There is also the possibility that companies in the medical sector looked to raise prices before the new Administration takes office.
The latest New York Empire index and Philadelphia Fed manufacturing survey will be released on Tuesday and Thursday respectively.
4. UK Prime Minister May Speech
UK Prime Minister May is due to deliver a speech on Brexit on Tuesday January 17th.
The UK Brexit debate will continue to have a very important impact on UK sentiment and Sterling moves as the UK moves towards triggering Article 50 at the end of March.
May’s speech will be analysed closely for hints on the likely Brexit negotiating stance.
Markets have become fixated with the binary position of whether there will be a ‘soft’ or ‘hard’ Brexit. In simplistic terms, a ‘soft’ exit, in which the UK maintains single market access, is seen as positive for Sterling, while a ‘hard’ Brexit without single-market access is seen as potentially damaging for the economy.
The impact of the speech will depend in part on whether May can shift the debate towards a wider perspective of global trading relationships. In the very short term, suggestions of being outside the single market will tend to weaken Sterling, although a push for transitional arrangements would cushion the impact.
It is also possible that the Supreme Court ruling on whether parliament needs to be consulted on a triggering of Article 50 will be delivered in the week ahead. Markets are assuming that the government will lose the appeal and an expected rejection would have limited impact.
The latest UK CPI data is due on Tuesday January 17th at 04:30 EST and will have an important impact on overall Bank of England expectations.
The labour-market data will be released on Wednesday with the important December retail sales data due on Thursday.
5. Bank of Canada Monetary Policy Decision
The Bank of Canada will announce its latest policy decision on Wednesday January 18th at 10:00 EST
Governor Poloz will hold a news conference at 11:15 EST.
At this policy meeting, the Bank of Canada will announce its latest policy decision and also release its latest monetary policy report, which is published every other meeting.
There are strong expectations that the Bank of Canada will hold interest rates at 0.50%, but this will be a very important meeting for the central bank, especially after recent data.
The main focus will be on inflation, especially after the much weaker than expected CPI inflation data released in December. Any downgrading of inflation forecasts would increase speculation that the Bank of Canada will move to ease monetary policy during the first half of 2017.
Commentary on exports will also be important, especially after the better than expected trade data for November and any upgrading of export forecasts would lessen pressure for monetary easing.
Rhetoric surrounding the housing sector will also have important implications for financial stability and monetary policy.
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Monday, January 16
U.S. financial markets will be closed for Martin Luther King Day.
Bank of England Governor Mark Carney is due to speak at an event in London.
Tuesday, January 17
New Zealand is to release private sector data on business confidence.
The U.K. is to release data on inflation.
The ZEW Institute is to report on German economic sentiment.
New York Fed President William Dudley is to speak at an event in New York and the U.S. is also to release the Empire state manufacturing index.
U.K. Prime Minister Theresa May is due to speak about starting proceedings for Britain’s exit from the European Union.
Wednesday, January 18
The U.K. is to publish its monthly jobs report.
The euro zone is to release revised data on inflation.
The U.S. is to publish figures on inflation and industrial production. Later in the day, Fed Chair Janet Yellen is to speak at an event in San Francisco.
The Bank of Canada is to announce its latest monetary policy decision and hold a press conference to discuss the economic outlook.
Thursday, January 19
Australia is to publish its monthly employment report.
The ECB is to announce its latest monetary policy decision. The announcement is to be followed by a press conference with President Mario Draghi.
Canada is to report on manufacturing sales and foreign securities purchases.
The U.S. is to release a series of reports, including data on building permits, housing starts, initial jobless claims and manufacturing activity in the Philadelphia region.
Fed Chair Janet Yellen is to speak at an event in Stanford.
Friday, January 20
China is to release data on fourth quarter growth as well as figures on industrial production.
The U.K. is to release data on retail sales.
Canada is to round up the week with data on retail sales.