US Elections, General

Week Ahead: Chinese and US data take front stage

George Walker, Friday, 8 January 2021

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With the first trading week of the year done and dusted, we move into the one ahead – and it’s a busy one. Earnings season is upon us and could be critical to the performance of equity markets as they trade near record highs. Last time out, US companies largely reported results ahead of analysts’ expectations, however, forecasts could have been downplayed due to the pandemic. There will be many questions being asked as these results hit the wires. The focus might not be fixated on previous quarterly performance, but more so on forward guidance. With the global economy having been severely impacted, many companies might have had to slash expectations.

Among those expected to report their results this week are BlackRock, Taiwan Semiconductor Manufacturing Company, as well as the big banks: JP Morgan Chase, Citigroup, and Wells Fargo. Although corporate earnings will likely dominate most of the headlines, macroeconomic data could still play a part in overall sentiment as investors will want to see the underlying health of economies.

Is it too early for interest rate hikes?

The trading week starts in the early hours of Monday morning with Retail Sales from Australia and important Producer Price Index and Consumer Price Index inflation figures out of China. Inflation currently sits ~11-year lows mainly due to volatile food prices. The economy continues to recover, and expectations are that the People’s Bank of China could start to raise interest rates again in 2021. Hiking interest rates is a normal tactic to contain higher inflation, so either a hit or miss could influence their decision-making.

Tuesday is the quietest day of the week on the macro front, with only API Weekly Crude Oil Stock during the evening. Oil traded at the highest level since last February last week as Saudi Arabia, the world’s largest oil producer, announced further cuts to production output. We also saw a drawdown in US storage levels, which helped support the price action. The API Weekly Crude Oil Stock on Tuesday, as well as the EIA Crude Oil Stocks Change on Wednesday afternoon could continue to influence the price of oil.

US data could be telling

Midweek, we’ve got Industrial Production out of Europe and US Consumer Price Index data an hour before US markets open on Wednesday. As global economies start to recover, Central Banks have renewed focus on inflation when determining monetary policy, so we could see volatility in the corresponding currencies as the data is released.

The USD could be in focus as we settle into Thursday afternoon, when we expect the latest Initial and Continuing Jobless Claims, as well as Retail Sales figures. It goes without saying that employment is a major point of consideration for the Federal Reserve when deciding on near-term monetary policy. Strong numbers on all fronts could see the USD strengthen as expectations of policy tightening could start to set in.

Finishing strong

Friday looks set to be the busiest day for data releases, starting overnight in China with Gross Domestic Product, Industrial Production, and Retail Sales. Recent data out of China has shown signs that the world’s second-largest economy is on the road to recovery following the pandemic. Figures better or worse-than-expected could set the initial tone for trading throughout the morning.

Manufacturing and Industrial Production updates from the UK can be seen an hour before European markets open for trading, as well as Producer Price Index and Industrial Production numbers out of the US in the afternoon. That about wraps up the week – if you’re following earnings, remember to keep an eye on whether they’re posted before market open or at market close, to pre-empt any subsequent movement or gaps. 

All times indicated are GMT.
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ECONOMIC CALENDAR (all times are GMT)

Monday, 11th January
00:30 AUD Retail Sales
01:30 CNY Producer Price Index
01:30 CNY Consumer Price Index
14:40 CAD Bank of Canada Business Outlook Survey
23:50 JPY Current Account
23:50 JPY Bank Lending
23:50 JPY Trade Balance – BOP Basis

UK Company Announcements:
N/A

US Company Announcements: 
N/A

Tuesday, 12th January
07:00 GBP Goods Trade Balance
07:30 CHF Producer and Import Prices
11:00 USD NFIB Business Optimism Index
13:55 USD Redbook Index
21:30 USD API Weekly Crude Oil Stock
23:30 AUD Westpac Consumer Confidence

UK Company Announcements:
Auto Trader
Ferrexpo
JD Sports

US Company Announcements:
N/A

Wednesday, 13th January
07:00 GBP Index of Services
10:00 EUR Industrial Production
13:30 USD Consumer Price Index
13:30 USD Consumer Price Index Core
13:30 USD Consumer Price Index ex Food & Energy
15:00 USD EIA Crude Oil Stocks Change
19:00 USD Monthly Budget Statement
19:00 USD Fed’s Beige book
23:50 JPY Producer Price Index

UK Company Announcements:
Just Eat
Persimmon
Sainsbury (J)

US Company Announcements:
Infosys Limited
HIS Markit Ltd

Thursday, 14th January
01:30 CNY Imports
01:30 CNY Exports
01:30 CNY Trade Balance
13:30 USD Retail Sales
13:30 USD Retail Sales ex Autos
13:30 USD Retail Sales Control Group
13:30 USD Initial Jobless Claims
13:30 USD Continuing Jobless Claims
13:30 USD Import Price Index
13:30 USD Export Price Index
17:00 USD EIA Natural Gas Storage Change
21:45 NZD Building Permits

UK Company Announcements:
Ashmore
Dunelm
Hays
Tesco
Whitbread
Wood Group (J)

US Company Announcements:
Taiwan Semiconductor Manufacturing Company Ltd
BlackRock Inc

Friday, 15th January
00:30 AUD Home Loans
00:30 AUD Investment Lending for Homes
01:30 CNY House Price Index
02:00 CNY Gross Domestic Product
02:00 CNY Industrial Production
02:00 CNY NBS Press Conference
04:00 CNY Retail Sales
04:30 JPY Tertiary Industrial Index
07:00 GBP Manufacturing Production
07:00 GBP Industrial Production
07:00 GBP Total Trade Balance
10:00 EUR Trade Balance
13:30 USD Producer Price Index 
13:30 USD Producer Price Index ex Food & Energy
13:30 CAD New Housing Price Index
14:15 USD Industrial Production
14:15 USD Capacity Utilisation
15:00 USD Michigan Consumer Sentiment Index Preliminary
15:00 USD Business Inventories

UK Company Announcements:
N/A

US Company Announcements:
JP Morgan Chase & Co
Citigroup Inc
Wells Fargo & Company
PNC Financial Services Group

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