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Weekly Outlook: Jan 13 – Jan 17: US and China to Sign “Phase One” Deal, UK GDP and US CPIs

JFD

This week, attention is likely to turn back to the US-China sequel, with the “Phase One” deal expected to be signed on Wednesday. Given that most of this may have already been priced in, we believe that focus may fall on possible clues over how the two nations plan to move forward. We also get several UK data, including the monthly GDP for November, were soft numbers could reinforce BoE Governor Carney’s remarks that a cut could be delivered if weakness in the economy persists. The US and Swedish inflation numbers, as well as China’s GDP for Q4 are also on this week’s agenda.

On Monday, focus will fall on several UK data. We get the 3-month rolling monthly GDP for November, which is expected to have contracted 0.1% after stagnating previously. Preliminary data on business investment for Q4 are expected to show a 0.5% slide after stagnating in Q3. Industrial and manufacturing production are both expected to have slid 0.1% mom and 0.3% mom in November, after rising 0.1% and 0.2% respectively. This would drive both the yoy rates further into the negative territory. Specifically, they are expected to have slid to -1.4% and -1.7%, from -1.3% and -1.2%. The nation’s trade balance for November is also due to be released, with the trade deficit expected to have narrowed somewhat. Overall, these releases are expected to come on the soft side. Last week, BoE Governor Mark Carney hinted that a rate cut could be delivered if weakness in the economy persists, and thus, a disappointment in the aforementioned data could enhance the case.

On Tuesday, during the Asian morning, we get China’s trade balance for December, but...

Read the full financial markets weekly outlook on JFD Research.

JFD Review

Source: https://www.jfdbank.com/en/research/us-and-china-to-sign-phase-one-deal-uk-gdp-and-us-cpis-20200113
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