The Week Ahead: 8th – 12th January 2024

Overview for the Week Ahead

It is an important week ahead for central banks, with the US CPI Report and economic data from China, Japan, the euro area, and the UK in focus.

Highlights of the Week

  • US CPI Report to decide the fate of the January Fed interest rate decision.
  • German economic indicators could force the ECB to reconsider its stance on interest rates.
  • Geopolitics, stimulus chatter from Beijing, and economic data from China also need consideration.

On Thursday, the US CPI Report warrants investor attention. After the better-than-expected US Jobs Report, hotter-than-expected inflation numbers could temper bets on a Q1 Fed rate cut.

In December, a pickup in wage growth and tight labor market conditions could drive disposable income higher. An upward trend in disposable income could fuel consumer spending and demand-driven inflation.

The Fed could respond by maintaining interest rates at current levels for longer to curb spending and dampen demand-driven inflation.

Other stats include trade data and the weekly jobless claims report. However, barring a marked increase in US initial jobless claims, the focus will be on the inflation reports.

Beyond the numbers, FOMC member commentary also needs monitoring. Reactions to the US Jobs and Inflation reports would move the dial.

The German economy will put the EUR/USD in focus early in the week. On Monday, German factory orders and trade data will draw investor interest. Recent economic indicators, including private sector PMIs, sounded the recession bell. Another slide in factory orders and weaker trade terms could drive bets on a Q1 2024 ECB rate cut.

On Tuesday, German industrial production numbers also need consideration. Weaker production would align with expectations of a euro area recession.

Beyond the numbers, the ECB Economic Bulletin and ECB commentary will also influence EUR/USD price trends. 

UK retail sales figures will draw investor interest on Tuesday. The BRC Retail Sales Monitor will give the markets a snapshot of consumer spending at the end of the year.

Beyond the numbers, BoE Governor Andrew Bailey and BoE members will attend the Treasury Select Hearing on the December Financial Stability Report. The hearing will take place on Wednesday, 10th January.

Have your trading charts ready this week!

This Week’s High Impact Events

The times below are GMT +2.

Monday 8th January

  • 09.30 – Switzerland – CPI m/m

Potential instruments to Trade: CHF Crosses. 

Tuesday 9th January

  • No High Impact Events

Potential instruments to Trade: USD Crosses. 

Wednesday 10th January

  • 02.30 – Australia – CPI y/y

Potential instruments to Trade: AUD Crosses. 

  • 16.15 – UK – BoE Gov Bailey Speaks

Potential instruments to Trade: GBP Crosses. 

Thursday 11th January

  • 15.30 – US – Core CPI, CPI m/m, Unemployment Claims

Potential instruments to Trade: USD Crosses. 

Friday 12th January

  • 03.30 – China – CPI y/y, PPI y/y

Potential instruments to Trade: CNY Crosses. 

  • 09.00 – UK – GDP m/m

Potential instruments to Trade: GBP Crosses. 

  • 15.30 – US – Core PPI m/m, PPI m/m`

Potential instruments to Trade: USD Crosses. 

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