The macro data calendar was light last week (bar Friday) but is heavy this week (bar today). The UK is due to release December CPI-inflation, fiscal and retail sales data as well as January PMI figures. The Eurozone will also release the latter while the European Central Bank holds its first policy meeting of the year. In Australia the focus will be on labour market and retail sales data while New Zealand is due to publish CPI-inflation numbers for Q4. The macro calendar is light in the United States but the world will be watching president-elect Joe Biden’s inauguration on 20th January.
Monday 18th January
Eurozone: European Central Bank President Lagarde to speak.
United Kingdom: Bank of England Governor Bailey to speak. Bailey may add his view on the pros and cons of cutting the policy rate into negative territory but at present the majority view within the nine-member Monetary Policy Council is that the policy rate is likely to remain at its record-low of 0.10% for now.
Tuesday 19th January
Eurozone: German ZEW Economic sentiment (January). This index of economic sentiment in the EU’s largest economy rebounded in December, which may have been partly due to the start of the vaccination program in Germany. The consensus forecast is that sentiment rose again in January to 60.0 from 55.0 in December.
United Kingdom: Monetary Policy Council member Haldane to speak.
Wednesday 20th January
United Kingdom: CPI-inflation (December). Core CPI-inflation has been choppy in the past 6-7 months, oscillating between 0.9% yoy (August) and 1.8% yoy (July). It was at the bottom of this range in November (1.1%) but is expected to have risen to 1.3% yoy in December (broadly the middle of its range). If correct these data would be unlikely to sway the MPC in cutting the policy rate at this stage.
United States: Inauguration of president-elect Joe Biden. The main concern ahead of Biden’s formal inauguration – which President Trump said he would not attend – is about security given the events in the Capitol ten days ago. Biden’s speech is likely to focus on the need for the United States to heal the bitter divide between Democrat and Republican voters.
Thursday 21st January
Australia: Labour market data (December). The Australian economy created 675,800 jobs in June-November and as a result the unemployment rate fell from 7.4% in June to 6.8% in November. The consensus forecast is that the economy created a further 50,000 jobs in December and that the unemployment rate fell to an eight-month low of 6.7%.
Switzerland: Trade balance (December).
Eurozone: European Central Bank policy meeting, statement and press conference. The ECB will likely keep its deposit rate unchanged at -0.50% but address the potential impact of a so-far slow vaccination program in the Eurozone on its economic growth recovery and inflation trajectory.
United States: Initial jobless claims (week ending 21st January).
United States: Philadelphia Fed manufacturing index (January). The NY Empire State index fell further in January and the consensus forecast is that the Philly Fed index rebounded only marginally in January to 12.0 from 9.1 in December.
New Zealand: CPI-inflation (Q4 2020). The expectation is that the pick-up in domestic growth in Q4 contributed to headline CPI-inflation accelerating from 0.7% qoq in Q3 to 0.9% qoq in Q4 (its fastest rate in nine quarters). Even so the RBNZ is unlikely to consider a tightening of monetary policy at this stage.
Friday 22nd January
Australia: Retail sales (December). Retail sales surged 7.1% mom in November, due in part to a relaxation in social distancing rules.
United Kingdom: Retail sales (December). The GBP-value of retail sales shrunk 3.8% mom in November – its biggest contraction in seven months – in the wake of a tightening of social distancing measures in the United Kingdom. The consensus forecast is that retail sales rebounded 0.9% mom in December but even if true the bigger issue is whether the far larger service sector benefited from any pick-up in consumer demand.
United Kingdom: Public Sector New Borrowing (December). The UK fiscal deficit rose to a 6-month high of £30.84bn in November and is forecast to have remained elevated in December at £27.3bn as a result of the government’s expensive measures to support workers and corporates.
Eurozone: Composite PMI (January, preliminary data). This timely index of economic activity in the Eurozone jumped to 49.1 in December from 45.3 in November but is expected to remain unchanged in January.
United Kingdom: Composite PMI (January, preliminary data). Similarly the analyst consensus forecast is that the composite PMI – a weighted average of the manufacturing and services PMIs – was unchanged in January at 50.7.
