The Week Ahead: 16th – 20th January 2023

Overview for the Week Ahead

Blue Monday rolls around every year on the third Monday in January. The meaning of this day is filled with controversy because it is supposedly the saddest day of the year.

It will be a busy run of data from China, the UK, and the US this week including inflation figures, retail sales and the Fed’s Beige Book on the economic outlook. The European Central Bank will publish the minutes of its December meeting on Thursday and various central bankers will be discussing regional and global economics at Davos.

The UK inflation rate will be updated on Wednesday. The outlook is not good, particularly after recent comments by Bank of England chief economist Huw Pill. Ken Murphy, chief executive of the UK’s largest food retailer Tesco, even warned that UK inflation could climb further. Last month’s release showed that the cost of living as defined by the consumer price index (CPI) was 10.7 per cent in November, down from 11.1 per cent in October.

The dollar fell to a seven-month low against major peers on Monday while the yen surged to an over seven-month peak, as traders ramped up bets that the Bank of Japan may make further tweaks to its yield control policy at its meeting this week.

With decades-high inflation in the world’s largest economy showing signs of cooling, investors are now growing increasingly confident that the Fed is nearing the end of its rate-hike cycle, and that rates would not go as high as previously feared.

U.S. markets are closed on Monday for a holiday.

The Japanese yen rose to a more than seven-month peak on Monday, as market sentiment was dominated by expectations that the BOJ would make further tweaks to, or fully abandon, its yield control policy when it announces its monetary policy decision on Wednesday.

Two important readings come out early this week ahead of the Bank of Canada‘s interest rate decision on 25^th January.

Earlier this month a strong jobs report in Canada tilted the odds in favour of the central bank hiking its rate by another 25 basis points to 4.5 per cent.

Have your trading charts ready!

This Week’s High Impact Events

The times below are GMT +2.

Monday 16^th January

DAY 1 – WEF Annual Meetings

Potential instruments to Trade: All Currency Crosses.

17.00 – UK – BoE Gov Bailey Speaks

Potential instruments to Trade: GBP Crosses.

17.30 – Canada – BoC Business Outlook Survey

Potential instruments to Trade: CAD Crosses.

Tuesday 17^th January

04.00 – China – GDP q/y

Potential instruments to Trade: CNY Crosses.

09.00 – UK – Claimant Count Change

Potential instruments to Trade: GBP Crosses.

12.00 – Europe – German ZEW Economic Sentiment

Potential instruments to Trade: EUR Crosses.

15.30 – Canada – CPI m/m

Potential instruments to Trade: CAD Crosses.

15.30 – US – Empire State Manufacturing Index

Potential instruments to Trade: USD Crosses.

DAY 2 – WEF Annual Meetings

Potential instruments to Trade: All Currency Crosses.

Wednesday 18^th January

Tentative – Japan – BoJ Outlook Report, Monetary Policy Statement, BoJ Press Conference

Potential instruments to Trade: JPY Crosses.

09.00 – UK – CPI y/y

Potential instruments to Trade: GBP Crosses.

DAY 3 – WEF Annual Meetings

Potential instruments to Trade: All Currency Crosses.

15.30 – USD – Core PPI m/m & Core Retail Sales m/m

Potential instruments to Trade: USD Crosses.

Thursday 19^th January

02.30 – Australia – Employment Change & Unemployment Rate

Potential instruments to Trade: AUD Crosses.

DAY 4 – WEF Annual Meetings

Potential instruments to Trade: All Currency Crosses.

12.30 – Europe – ECB President Lagarde Speaks

Potential instruments to Trade: EUR Crosses.

15.30 – US – Philly Fed Manufacturing Index, Unemployment Claims

Potential instruments to Trade: USD Crosses.

20.15 – US – FOMC Member Brainard Speaks

Potential instruments to Trade: USD Crosses.

Friday 20^th January

09.00 – UK – Retail Sales m/m

Potential instruments to Trade: GBP Crosses.

10.00 – Switzerland – SNBV Chairman Jordan Speaks

Potential instruments to Trade: CHF Crosses.

DAY 5 – WEF Annual Meetings

Potential instruments to Trade: All Currency Crosses.

12.00 – Europe – ECB President Lagarde Speaks

Potential instruments to Trade: EUR Crosses.

15.30 – Canada – Core Retail Sales m/m

Potential instruments to Trade: CAD Crosses.

17.00 – US – Existing Home Sales

Potential instruments to Trade: USD Crosses.

20.00 – US – FOMC Member Waller Speaks

Potential instruments to Trade: USD Crosses.

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