First Trading Week of 2018 and the latest inflation figures for China and US under close scrutiny | Weekly Market Snapshot 08-12/01

The first full trading week of 2018 witnesses a return to traditional economic calendar events effecting our: FX, equity and commodity markets. It’s a busy week for Chinese, USA and European data, including several inflation figures, most notably for China and the USA. The latest production figures for the U.K. will be analysed carefully, for any signs of comparative weakness in the economy as it faces Brexit in early 2019. Germany’s latest import and export figures will be published, alongside its industrial production growth, which are carefully monitored due to Germany’s portion as the engine of growth in Europe. The various PPI metrics for the USA will be revealed, which may deliver early indications regarding any increasing inflation figures in the USA economy.

Sunday starts the week with the latest foreign reserves figure for China, the expectation is for a slight fall to $3,115b in December. On Monday morning we receive the latest YoY foreign investment metric from China, currently at 90.7% there is little expectation for any significant change. Germany factory orders showed an encouraging annual growth figure of 6.9% up to November 2017, the expectation is for this figure to be maintained. Swiss CPI is currently running at 0.8%, a figure that is unlikely to change once December’s value is released. Combined with the latest sight deposits detail from Swiss banks, both figures may impact on the value of the Swiss franc, if the metrics miss or best forecasts.

A cluster of confidence readings for the Eurozone is published on Monday; consumer, industrial, business and investor, although strictly ranking as low impact, the cumulative reading is monitored closely. Retail sales in the Eurozone slumped into negative territory in November, December’s reading should be positive and have the knock on effect of rising the YoY figure, above the 0.4% recorded for November. As attention turns to the USA the key reading of the day is consumer credit; predicted to fall to $18b in November from $20.5b in October. Next month’s figure is likely to increase, due to the holiday season consumer spend.

Tuesday begins with house sales from N.Z., which fell by a stunning -8.9% YoY up to December. Japanese real labour cash earnings are forecast to have gone negative in November at -0.1%. With cash earnings up 0.6% YoY. Consumer confidence in Japan is forecast to rise marginally to 45. Australia’s building approvals increased dramatically YoY, up 18.4% to November, the latest figure for December is not expected to slow significantly. December’s Swiss unemployment reading is forecast to remain unchanged at 3.2%, retail sales fell significantly in Switzerland in November, down -3%, a seasonal improvement is expected.

German industrial production unexpectedly fell in November by -1.4%, and 2.7% YoY, an improvement is anticipated. Germany’s November trade balance and current account surpluses are forecast to improve above the approximate €18b October readings. The latest exports and imports metrics for Germany are also published. The latest Eurozone unemployment rate is currently at 8.8%, the most up to date November level is forecast to remain unchanged.

On Wednesday a cluster of Chinese data is published, including the loans made in Yuan in December and the latest CPI figure, currently at 1.7% the forecast is for a rise to 1.9%. High impact Chinese data is having very little effect on global equity and FX markets lately, unless the figure released is a shock. As focus shifts to the European markets’ open, the minutes for the latest ECB monetary policy/rate setting meeting are published, investors will analyse the content for any forward guidance, in relation to a reduction in the APP (asset purchase programme), over and above the commitments already made, or clues regarding potential interest rate rises in 2018. Click here to continue reading https://goo.gl/TJ75B6