US Elections, General

Week Ahead: Biden, Big Banks, and Central Banks

George Walker, Friday, 15 January 2021

MKT-7083_WA-Biden_blog


We kick off the trading week with Gross Domestic Product, Industrial Production, and Retail Sales out of China Sunday night. Recent data has shown signs that the world’s second-largest economy is on the road to recovery following the pandemic. Better or worse-than-expected figures could set the initial tone for trading throughout the morning.

Industrial Production figures from Japan follow shortly thereafter, as well as the start of the Eurogroup meeting. This meeting will be attended by the Eurogroup President, the Finance Minister of each Member State of the Eurozone, the Commissioner for Economic and Monetary Affairs, and the President of the European Central Bank. The goal of the meeting will be to assess the current economic situation in the Eurozone, and to discuss ways to help stimulate growth.

Tuesday’s looking quiet, with Consumer Price Index inflation data from Germany being the only notable release to have on our radars.

Central banks take centre stage

The Peoples Bank of China are up next in the early hours of Wednesday morning with an update on Interest Rates. Like most central banks, the PBoC cut interest rates earlier in the year to 3.85% and are not expected to implement changes at this meeting. A common theme has been no immediate change, but a readiness and willingness to provide further stimulus if needed.

 

Joe Biden takes office  

Midweek sees CPI Inflation data released from the UK, Eurozone, and Canada. Wednesday is also Inauguration Day, whereby Joe Biden will be sworn in as the 46th President of the United States. After a tumultuous start to the year, and having got insights into Biden’s stimulus proposal just last week, it’s worth keeping an eye on market sentiment.

The Bank of Canada’s rate decision follows – the central bank cut their interest rates from 1.75% down to 0.25% in order to limit the damage to the economy. Previous comments indicate that they are prepared to do more to boost the economy if needed, although no change is expected to the benchmark interest rate at this meeting. Will the accompanying statement and press conference provide clarity on forward guidance?

Next up, we have the Bank of Japan on the wires in the early hours of Thursday morning. The BoJ has adopted negative rates which currently sit at -0.10%. In recent remarks, the current rates are supportive enough for an economy reeling from the impact of the ongoing pandemic. The difficult decision they have to make now is how long they keep rates negative. This can have an impact on inflation, which can stall economic recovery as people are less willing to go out and spend if they believe inflation will remain subdued or decline. The press conference will be where traders are focused to see if any amendments are on the horizon.

Thursday’s headline event could be the Interest Rate Decision from the European Central Bank, followed by its Policy Statement and Press Conference. European economies have been among the those hit the hardest. The dilemma they face is their limited options as interest rates are already at rock bottom, so Quantitative Easing (QE) has been their go-to.  Last time out, the ECB kept interest rates unchanged but did mention it was ready to increase its stimulus measure as the Eurozone faces a deep and potentially lengthy economic crisis. The press conference at 13:30 GMT is where traders and investors will be focused to see what the plans are going forward to limit the damage to the economy and attempt to get back on the right track.

Initial and Continuing Jobless Claims data from the US, as well as CPI data from New Zealand and Japan round off the penultimate trading day of the week.

Throughout Friday, there are preliminary Services and Manufacturing figures released from Germany, the Eurozone, the UK, and the US. Although only preliminary readings, combined, Service and Manufacturing contribute to a nation’s GDP and could determine whether markets finish on the front foot, or whether traders look to de-risk ahead of the weekend.

Earnings take a back seat.. for now

Along with a huge week on the macro data front, a major driver of US indices could be earnings releases. Markets have been trading near record highs and investors will want to see if the fundamentals match the current sentiment.

Among those reporting this week will be Bank of America, Netflix, Goldman Sachs, Halliburton, UnitedHealth Group, Procter & Gamble, Morgan Stanley, and BNY Mellon. As well as seeing exaggerated moves in the individual equities, both their results and forward guidance can see sentiment shift accordingly and affect markets as a whole.

All times indicated are GMT.

ECONOMIC CALENDAR (all times are GMT)

Monday, 18th January

02:00 CNY Gross Domestic Product
02:00 CNY Industrial Production
02:00 CNY Retail Sales
02:00 CNY NBS Press Conference
04:30 JPY Industrial Production
10:00 EUR Eurogroup Meeting
21:00 NZD NZIER Business Confidence
23:30 AUD Westpac Leading Index

UK Company Announcements:

N/A

US Company Announcements:

N/A

Tuesday, 19th January

00:00 AUD New Home Sales
07:00 EUR EcoFin Meeting
07:00 GER Consumer Price Index
07:00 GER Harmonised Index of Consumer Prices
07:30 CHF Producer and Import Prices
09:00 EUR Current Account
09:00 EUR ECB Bank Lending Survey
10:00 EUR ZEW Survey – Economic Sentiment
10:00 EUR Construction Output
10:00 GER ZEW Survey – Economic Sentiment
10:00 GER ZEW Survey – Current Situation
13:30 CAD Manufacturing Sales
13:30 CAD Wholesale Sales
13:55 USD Redbook Index
18:00 GBP BoE’s Haldane Speech
23:30 AUD Westpac Consumer Confidence

UK Company Announcements:

Experian
Kier
Premier Foods
Rio Tinto

US Company Announcements:

Bank of America
Netflix
Goldman Sachs
Interactive Brokers
Halliburton

Wednesday, 20th January

01:30 CNY PBoC Interest Rate Decision
07:00 GBP Consumer Price Index
07:00 GBP Core Consumer Price Index
07:00 GBP Retail Price Index
07:00 GBP Producer Price Index – Input
07:00 GBP Producer Price Index – Output
07:00 GBP PPI Core Output
07:00 GER Producer Price Index
10:00 EUR Consumer Price Index
10:00 EUR Consumer Price Index – Core
13:30 CAD BoC Consumer Price Index Core
13:30 CAD Consumer Price Index
13:30 CAD Consumer Price Index – Core
15:00 CAD BoC Interest Rate Decision
15:00 CAD BoC Rate Statement
15:00 CAD Bank of Canada Monetary Policy Report
15:30 USD EIA Crude Oil Stocks Change
16:15 CAD BoC Press Conference
21:30 USD API Weekly Crude Oil Stock
23:50 JPY Imports
23:50 JPY Exports
23:50 Merchandise Trade Balance Total

UK Company Announcements:

Antofagasta
BHP Group
Burberry
Cairn Energy
CMC Markets
Wetherspoon JD
WH Smith

US Company Announcements:

UnitedHealth Group
Procter & Gamble
ASML Holding N.V.
Morgan Stanley
U.S. Bancorp
Bank of New York Mellon

Thursday, 21st January

All Day - EUR – Leaders’ Summit
00:00 AUD Consumer Inflation Expectations
00:30 AUD Unemployment Rate
00:30 AUD Employment Change
00:30 AUD Full-Time Employment
00:30 AUD Part-Time Employment
00:30 AUD Participation Rate
03:00 JPY BoJ Interest Rate Decision
03:00 JPY BoJ Monetary Policy Report
03:00 JPY BoJ Outlook Report
06:00 JPY BoJ Press Conference
12:45 EUR ECB Interest Rate Decisio
12:45 EUR ECB Deposit Rate
13:30 EUR ECB Monetary Policy Statement and Press Conference
13:30 USD Initial Jobless Claims
13:30 USD Continuing Jobless Claims
13:30 USD Building Permits
13:30 USD Housing Starts
13:30 USD Philadelphia Fed Manufacturing Survey
13:30 CAD ADP Employment Change
15:00 EUR Consumer Confidence
21:45 NZD Consumer Price Index
22:00 AUD Commonwealth Bank Services PMI Preliminary
22:00 AUD Commonwealth Bank Manufacturing PMI Preliminary
22:00 AUD Commonwealth Bank Composite PMI Preliminary
23:30 JPY National Consumer Price Index
23:30 JPY National CPI ex-Food & Energy

UK Company Announcements:

IG Group Holdings
AJ Bell
Sage Group

US Company Announcements:

Union Pacific Corporation
Intuitive Surgical
CSX Corporation
Truist Financial
TAL Education Group
PPG Industries
The Travelers Companies
Baker Hughes Company

Friday, 22nd January

00:30 JPY Jibun Bank Manufacturing PMI Preliminary
00:30 AUD Retail Sales Preliminary
07:00 GBP Retail Sales
07:00 GBP Retail Sales ex-Fuel
08:30 GER Markit Manufacturing PMI Preliminary
08:30 GER Markit Services PMI Preliminary
08:30 GER Markit PMI Composite Preliminary
09:00 EUR Markit Manufacturing PMI Preliminary
09:00 EUR Markit Services PMI Preliminary
09:00 EUR Markit PMI Composite Preliminary
09:30 GBP Markit Manufacturing PMI Preliminary
09:30 GBP Markit Service PMI Preliminary
13:30 CAD Retail Sales
13:30 CAD Retail Sales ex-Autos
14:15 USD Markit Manufacturing PMI Preliminary
14:15 USD Markit Services PMI Preliminary
14:15 USD Markit PMI Composite Preliminary
15:00 USD Existing Home Sales
15:00 USD Existing Home Sales Change
17:00 USD EIA Natural Gas Storage Change
18:00 USD Baker Hughes US Oil Rig Count

UK Company Announcements:

Computacenter

US Company Announcements:

Schlumberger N.V

Share article