In the US a number of FOMC members are due to speak this week and markets will be looking for signs as to whether they support Fed Chairperson Powell’s more neutral, data-dependent policy stance. ISM non-manufacturing and CPI-inflation data for December are the key US releases this week. Note that the US Department of Commerce’s Bureau of Economic Analysis and Census Bureau are still not updating their websites or publishing economic data during the ongoing partial government shutdown, including key figures on external trade and new home sales.
The data calendar is reasonably light in the UK (bar monthly GDP data for November) while the focus in the Eurozone will likely be on German industrial output and export data for November and in particular the release of the ECB’s policy meeting minutes. There are a number of important Swiss data releases, including the unemployment rate, retail sales and CPI-inflation.
In Australia, markets will have to contend with external trade figures, the NAB business confidence index and retail sales.
Monday 7th January
United States: ISM non-manufacturing PMI (December). The manufacturing index fell sharply in December and analysts also forecast a fall in the important non-manufacturing index to 59.6 in December from 60.7 in November. If correct, this would provide further evidence that US GDP growth likely slowed further in Q4 from 3.4% qoq annualised in Q3.
United States: FOMC member Bostic to speak
Tuesday 8th January
Australia: Trade balance (November)
Eurozone: German industrial output (November). German growth has been weak since mid-2018, including in the industrial sector. Output has fallen about 2.6% since May (erasing the 2.6% gain recorded that month) and analysts forecast only a modest 0.3% recovery in November.
Switzerland: Unemployment rate (December). The 2.4% unemployment rate is one of the lowest in the world but this has not translated into stronger retail sales growth which averaged -0.3% yoy between January and October 2018.
Switzerland: Retail sales (November)
United States: Trade balance in goods and services (November). These data will likely only be released if the US government shutdown ends (see above)
Wednesday 9th January
Eurozone: German exports (November). Exports rebounded 0.7% mom in October following a 1.8% contraction in the previous 3 months and markets expect another weak print of -0.5% mom in November.
Switzerland: CPI-inflation (December). Headline inflation remains weak (0.9% yoy in November) and is expected to weaken further to 0.8% yoy in December. The lack of Swiss inflationary pressures suggests that the SNB will be in no rush to tighten monetary policy.
United States: FOMC members Bostic, Evans and Rosengren to speak
United Kingdom: Bank of England governor Carney to speak
Thursday 10th January
United Kingdom: BRC retail sales (December)
Australia: NAB business confidence (December)
Eurozone: Release of minutes of ECB’s December policy meeting. Eurozone growth and inflation have been soft and risks to global growth have intensified but the ECB has so far stuck to its guns. These minutes could provide an insight as to whether its tone has at least become more cautious.
United States: New home sales (November). These data will likely only be released if the US government shutdown ends (see above)
United States: FOMC members Barkin, Bullard, Evans and Clarida and Fed Chairperson Powell to speak
Friday 11th January
Australia: Retail sales (November)
United Kingdom: GDP growth (November). GDP growth was a paltry 0.1% mom in October and the economy flat-lined in August-September. The consensus forecast is for another weak print of 0.1% mom growth in November, which would provide further evidence that UK GDP growth likely slowed sharply in Q4 from 0.6% qoq in Q3.
United Kingdom: Industrial output and trade balance (November).
United States: CPI-inflation (December). Headline inflation fell to a 9-month low of 2.2% yoy in November and the consensus forecast is for a further drop to 1.9% yoy in December. The somewhat less volatile core measure of CPI-inflation is expected to have remained unchanged at 2.2% yoy. Markets are likely to be particularly sensitive to downward surprises in these inflation numbers.
