This week the central bank torch is passed to the BoE, the RBA and the RBNZ. All three Banks are expected to keep rates unchanged, so the focus will be on the statements. From the BoE and the RBNZ, we also get updated economic projections, which may well affect expectations with regards to their future policy moves. New Zealand’s and Canada’s employment reports could also capture extra market attention.
Monday is a PMI day. We get the final services and composite prints for January from several European nations and the Eurozone as a whole. As usual, Eurozone’s final prints are expected to confirm their preliminary estimates. The bloc’s retail sales for December are also coming out.
We get the services PMI for January from the UK as well. Following the above-consensus preliminary GDP print for Q4, PMIs are closely watched for early signs as to how the UK economy entered 2018. Both the manufacturing and construction indices for the month declined last week, but the pound reacted little to the releases. We still believe that the market may pay more attention to the services print as the service sector accounts for around 80% of the UK GDP. Expectations are for the index to have ticked down to 54.1 from 54.2 in December.
In the US, the final Markit Services and Composite PMIs for January are due to be released, alongside the ISM non-manufacturing index for the month. As we noted several times, the market tends to pay more attention to the ISM prints.
Read the full financial markets weekly outlook on JFD Research.