London, Monday, 06 February 2023
The focus in the US will be on trade balance information, Michigan consumer sentiment, and earnings announcements. Additionally, attention will be paid to inflation data from Germany, China, Brazil, Mexico, Russia, and the Philippines as well as central bank meetings in Australia and India. Finally, data on Q4 GDP growth will be released for the UK, Indonesia, Malaysia, and Canada, along with data on the unemployment rate.
The US economy will show weak growth this week, but earnings will be quite active. The top US businesses that release earnings results include Activision Blizzard, Fiserv, Vertex Pharmaceuticals, CVS Health, Uber, Walt Disney, AbbVie, PayPal, PepsiCo, and Philip Morris International. The preliminary January consumer mood index will be made public by the University of Michigan. The likelihood of improvement increased to 65, with inflation forecasts continuing their downward path. Investors will also pay attention to the Commerce Department's report on the trade balance. The trade deficit in goods and services must have increased from USD 61.5 billion in November 2022—the lowest deficit since September 2020—to USD 68.6 billion in December 2022.
The final factor influencing the discussion of whether the employment market is cooling or could yet surprise on the upside is the number of new and continuing jobless claims.
Along with business investment, trade balance, manufacturing and construction production, the United Kingdom will publish its preliminary estimate of fourth-quarter GDP growth. According to market forecasts, Britain's economy will stagnate as high energy prices and rising interest rates restrain consumer spending. Preliminary data for Germany are anticipated to reveal that consumer prices increased once more in January, sending the annual inflation rate back above 9%. Despite a pickup in factory orders, industrial production is forecast to decline in December.
Retail sales in the Euro Area are predicted to drop by 2%, the most in a year. Construction PMIs, France's international trade, Italy's industrial and retail activity, Switzerland's unemployment rate, Russia's inflation rate, Turkey's industrial output and unemployment rate are some items to keep an eye on. The central banks of Poland and Sweden will determine interest rates in terms of monetary policy.
China's January inflation reading will show how the country's departure from its zero-Covid policy has affected both consumer and producer pricing. Investors in Japan are anticipating the current account balance for Q4. Given that inflation in the nation has fallen below the central bank's upper target of 6% for the past two months, the RBI in India is anticipated to hike its benchmark repo rate by 25 basis points to signal the end of its current tightening course. India will also present its December industrial and manufacturing production. Fourth-quarter GDP figures will be released for Malaysia and Indonesia. Indonesia will also release the unemployment rate for December and the CPI for January.
For the fourth time in a row, the RBA in Australia is predicted to increase the cash rate by 25 basis points, bringing the total amount of tightening implemented to 325 basis points. This move is intended to reduce inflation, which soared to a 32-year high in the fourth quarter. The trade balance for December and the January Ai Group Industry index are two further Australian publications. New Zealand will then release its manufacturing PMI for January.
(Research and report by: The Decision Maker - Finance editors)