Economic Data, Earnings Report!
We will have heavy economic data in the first actual trading week of 2022. Last week ended with great employment data and now with further pressure on higher inflation, reviewing the FOMC minutes, confirming that expecting faster rate raise is not far than reality. The week ahead also will be more important for Stock Traders as earning reports will kick-off. And an important update from IFC Markets at the end. Let's check the most wanted data to watch in the week ahead.
EU Unemployment Rate - Monday
Last week we had mixed data from Eurozone. However, the overall impression, is that the economy is improving, even if slower than before. Last week also market was shocked by the 5% inflation number for December in Eurozone. And now in this week, we have to follow other economic data, including Monday's unemployment rate to find out the expectations from the European Central Bank (ECB). The European labor market is expected to continue improvement by falling unemployment rate, lower to 7.2% from 7.3% in last month. This expected improvement can support the Euro, a little bit against its crosses, but not much.
Fed Chair Powell Nomination Hearing - Tuesday
Mr. Powell will have a testimony, or better to say, Nomination Hearing before the Committee on Banking, Housing, and Urban Affairs, in the US Senate. While we almost do not have the doubt on his reaffirmation, hearing him will tell us more about his plans and outlooks as FED chair. After last week's employment data and published FOMC minutes of the December meeting, now investors pricing on even more contractionary policies. That must help the US dollar to increase again and hold its higher levels.
Inflation in leading economies - Wednesday & Thursday
Wednesday and Thursday, both first and second-biggest global economies will publish their December inflation numbers. In China, both producer and consumers numbers are expected to ease a bit, however, with additional government supports, and more cutting the reserve requirement ratio to stop the economy slows, the numbers can increase in the following months. In the US, on the other hand, while on the monthly scale we are expecting a bit slowdown in both producers' and consumers’ inflation number, annual numbers still improving, even if with the slower pace.
UK Monthly GDP - Friday
UK November GDP numbers this Friday come after mixed economic data in the past week from the United Kingdom. GDP rose 0.1% month-over-month in October, and now with November numbers, we can have a better guess about the Q4 GDP. With the expected increase in Service and Industrial sectors in November, we can see positive numbers. Anyhow, to have a brighter preview of the BoE policies in the following meetings, we have to wait for December numbers as well, especially considering that a significant surge in COVID cases during December can slow down the recovery. For the short term, this data can support the Sterling, against its crosses.
US Retail Sales - Friday
When prices just started to increase, we did not see that much impact on retail sales, however by time passing the effects were more obvious. In November, Retail Sales were well below expectations, with just a 0.3% increase. For December, just the New Year and Holiday shopping may improve the numbers, but estimates are for lower digits in the chart. The expected 0.2% rise over December, which would be the slowest pace in four months, can put more pressure on the US stock markets in the short term unless the data surprises us.
Again another earnings season. The last quarter of 2021 was so different for various sectors. As always in the first week, we will have Delta Airlines and then Banks' Reports among the companies that receive the most attention. Delta Airlines on Thursday, and then JPMorgan (JPM), Wells Fargo &Co (WFC), and Citigroup Earnings on Friday will be more important for market participants.