Events to Look Out for Next Week

The BoE and ECB were surprisingly more Hawkish than the market expected last week, and Sterling and the EURO responded accordingly. The US jobs report beat significantly to the upside adding to the swirling worry of prolonged inflation, central banks being behind the curve and pressure on stock markets. This week is much calmer, headlined by the US CPI report on Thursday which is underpinned by continuing geopolitical tensions.

Monday – 07 February 2022

Retail Sales (AUD, GMT 00:30) – Australian Retail Sales are expected to give a further glimpse into Covid-19 damage. Retail sales for December contracted to -4.4% m/m.
German Industrial Production (EUR, GMT 07:00) – The German industrial production reading is expected to decline further to -0.3% in December from -0.2% last month.

Tuesday – 08 February 2022

Trade Balance (USD, GMT 13:30) – The trade deficit is expected to widen in December to a new all-time large gap of -$81.9 bln from -$80.2 bln in November, versus a current record gap of -$81.4 bln in September.
Import/Export Price Index (USD, GMT 13:30) – Import and export prices are expected to rise 1.5% and 1.4% respectively in January after December drops of -0.2% for imports and -1.8% for exports. Ex-petroleum import prices are expected to rise 0.5%, while ex-agriculture export prices are expected to grow 1.5%. Oil prices rebounded in January after easing through December. We should continue to see a wide array of price gains attributable to global capacity constraints and supply chain disruptions.

Wednesday – 09 February 2022

Consumer Price Index (NZD, GMT 02:00) – New Zealand inflation rose at 2.96% in Q3 after the 2.3% q/q rise in Q2. Rising costs remain at the top of the economic agenda in all industrialized economies.
Trade Balance (EUR, GMT 07:00) – The German trade surplus narrowed to EUR 10.9 bln in November, from EUR 12.4 bln in the previous month.  For December it is expected at EUR 10.4 bln. The strong import numbers last week could push the surplus lower than expected.
Crude Oil Inventories (USOIL, GMT 15:30) – Oil prices continue to push higher: last week USOil, breached $90.00 a barrel, while inventories posted a surprise drawdown of 1.0 million barrels today is expected to show another drawdown of 1.0 million.
FOMC Member Mester speech (USD, GMT 17:00) – One of the most Hawkish members of the FOMC is due to speak about the economic outlook and monetary policy at an online event hosted by the European Economics and Financial Centre.
BoC’s Governor Macklem speech (CAD, GMT 17:00) – The Governor is due to  speak at the Canadian Chamber of Commerce, via satellite.

Thursday – 10 February 2022

EU Economic Forecasts (EUR, GMT 09:00) – This report includes economic forecasts for EU member states over the next 2 years, and covers about 180 variables.
Consumer Price Index (USD, GMT 15:30) – US inflation is expected to show January gains of 0.5% for the CPI headline and 0.5% for the core, following big respective December gains of 0.5% and 0.6%.  As-expected January figures would result in a 7.3% y/y increase that would mark a 40-year high, versus last month’s 39-year high of 7.0%, as gains eclipse the prior cyclical peak of 5.6% in July of 2008. The headline gain would be a high back to the 7.6% rise in February of 1982. Core prices should post a new 39-year high y/y gain of 6.0% from a 31-year high of 5.5% in December. These respective 39 and 38-year highs will sustain pressure on the Fed to complete the QE taper and rotate to rate hikes as 2022 progresses.
BOE Governor Bailey Speech (GBP, GMT 20:15) – After the Governors heavily criticised comments last week suggesting UK workers should not push for pay rises as this would further stoke inflation,, he is due to speak at an event hosted by The CityUK and is likely to be cross-examined on his comments.

Friday – 11 February 2022

Gross Domestic Product (GBP, GMT 07:00) The UK economy was stronger than expected before Omicron hit. Monthly GDP data for November were a positive surprise, with a rise of 0.9% m/m that compensated somewhat for the disappointing October reading. The three months rate lifted to 1.1% from 0.9%, and while Omicron will have curtailed overall activity in December, the last quarter of the year doesn’t look quite as disappointing as previously feared. Higher energy prices remain the main driving factor for the spike in prices and the expected jump in the cost of living, which will likely slow GDP growth.
Trade Balance (GBP, GMT 07:00) – The UK trade deficit is expected to have narrowed to 14.2 bln in December, from 11.34 bln in the previous month.

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Andria Pichidi

Market Analyst

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