Financial Market Outlook for January 25-29

Another turbulent week ended with falling and then rising equities and commodities prices – mostly oil. Well, this week isn’t likely to be much different so expect more high volatility on all fronts. The main events of the week come from the U.S. including FOMC meeting and GDP for Q4. Also, consumer confidence and housing data will be released. There are two more central bank rate decisions including by BOJ. And in Europe, the flash CPI, German business climate, EU monetary development, GB GDP for Q4 are the main reports. So let’s breakdown the main items for the week of January 25-29.  

(All times GMT):

Monday, January 25th

09:00 – German Ifo Business Climate Index: The index comprises of the difference (on a monthly basis) in the manufacturers, builders, wholesalers, and retailers in Germany as of January. In the December report, the business climate index edged down to 108.7; currently, the market expects a modest slide to 108.5;

18:00 – ECB President Draghi Speaks: He’s expected to speak at the Deutsche Borse New Year’s reception, in Frankfurt;

Tuesday, January 26th

10:45 – BOE Governor Carney Speaks: Carney is expected to testify on the Financial Stability Report before the Treasury Select Committee, in London;

15:00 – U.S. Consumer Confidence: According to the latest report for December, consumer confidence index bounced back to 96.5. The current estimates are that the index inch up to 96.6;

Wednesday, January 27th

00:30 – Australia’s CPI: According to the previous quarterly update, the CPI slipped to 0.5%, Q-o-Q. The current expectations are for the next report to show another fall to 0.3% quarterly pace;

15:00 – U.S. New Home Sales: This report will refer to December; in the previous report (opens pdf), the sales of new homes declined to an annual rate of 490,000; current estimates are for a faster growth with an annual rate of 503,000;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will release its weekly report on the U.S oil and petroleum stockpiles for the week ending on January 22nd;

23:50 – Japan’s Retail Sales: In the previous report for December 2015, retail sales declined by 1%;

19:30 – FOMC Meeting and Press Conference: This is the first meeting of the year and considering the bearish market sentiment, strong appreciation of the U.S. dollar and concerns over China’s economic woes, the Fed is likely to refer to all these issues in this meeting. This meeting doesn’t include a press conference or revised outlook, so the statement will be the main event. Given the current market sentiment, people expect a dovish statement and perhaps a bit of backpedaling from the Fed’s previous hawkish statement;

Thursday, January 28th

09:30 – Flash Great Britain GDP Q4 2015: This report will refer to the first estimate of the quarterly growth rate of the British economy for the fourth quarter of 2015; current projections are for a 0.5% gain;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will refer to the changes in the initial jobless claims for the week ending on January 22nd; in the previous report, jobless claims rose to 293K; the expectations are  for this number to fall to 281K;

13:30 – U.S Core Durable Goods: This monthly report refer to December and will indicate the developments in U.S demand for commodities including oil and gas. As of November  2015, core durable goods slipped by 0.1%, month over month; this time, however, core durable goods are expected to remain flat;

15:00 – U.S. Pending Home Sales: This report presents the developments in pending home sales in the U.S during December; in the previous update for November, pending home sales index declined by 0.9% (month-over-month); this time, however, the index is expected to rise by 1.1%;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and rates as of January 22nd;

Friday, January 29th

Tentative – Japan’s rate decision, press conference and updated outlook: In the upcoming Japanese monetary policy meeting, BOJ members will review the bank’s monetary policy and whether it’s time to increase the bank’s asset purchase program. The bank will also release its revised outlook about the economy. Given the recent strength of the Japanese yen, the BOJ may decide to step up and introduce more stimulus or at the very least imply if there is more stimulus to come in the near term;

07:00 – Germany’s Retail Sales: In the recent report for December 2015, retail sales rose by 0.2%;

09:00 – Euro Area Monetary Development: This monthly report will pertain to the changes of the M3, M1 and loans to private sector in the Euro area as of November 2015. In the October report, the annual growth rate for M3 inched down to 5.1%; current estimates are for the growth rate of M3 to slightly rise to 5.2%;

10:00 – EU CPI Flash Estimate: This index estimates the yearly consumer price index of the Euro Area. According to the last estimate for December, the annual CPI inched up to 0.2%. The core CPI remained at 0.9%;

13:30 – Canada’s GDP by Industry: This monthly report presents the developments in major industrial sectors for November 2015. In the previous update regarding October 2015, the real gross domestic product was 0%;

13:30 – First Estimate of U.S GDP for 4Q 2015: This will be the first estimate of U.S’s Q4 2015 real GDP growth. In the previous estimate for Q3 the GDP grew by 2% — not far off expectations. The current estimates are for the GDP growth rate to fall to 0.8%. A better than expected growth rate could drive higher the U.S. dollar, equities and commodities;

15:00 – UoM Consumer Sentiment (revised): University of Michigan will release its revised consumer sentiment monthly report; this survey could provide information regarding the changes in U.S consumers’ sentiment; according to the last report, the sentiment index rose to 92.6;

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