The economic calendar appears to be relatively heavy for another week. The FOMC is expected to remain on hold on Wednesday, so all the action is likely to come from the statement. On Friday, the US jobs report is likely to take center stage. Eurozone’s preliminary GDP and CPI data, on Tuesday and Wednesday respectively, could attract special attention as well.
On Monday, EU27 ministers meet for adopting a new set of directives for the Brexit negotiations. In particular, these directives will include details on the EU27 position on a Brexit transition period.
On the indicators front, the only noteworthy releases we get are the US personal income and spending for December, alongside the core PCE price index for the month. Expectations are for spending to have slowed to +0.5% mom from +0.6%, while personal income is forecast to have risen at the same pace as in November. The spending forecast is supported by the slowdown in December’s retail sales, while the unchanged monthly earrings rate for the month enhance the case for the income rate to have held steady as well. As for the PCE index, the Fed’s favorite measure of inflation, it is expected to have risen at the same pace as in November. That said, having in mind that the core CPI rate for the month ticked up, we see the risks as tilted to the upside.
On Tuesday, during the Asian morning, New Zealand’s trade balance is coming out, though no forecast is currently available. In Japan, the unemployment rate is expected to have held steady at 2.7%, while retail sales are forecast to have slowed on a yoy basis. In Australia, the NAB business survey for December is coming out. Given the Bank’s emphasis on wage growth, the part we focus more within this report is the Labour Costs Index.
Read the full financial markets weekly outlook on JFD Research.