Heavy data in the freedom week!
Hello and Happy Martin Luther King Day! Markets are still trying to digest the economic data and FED members` comments about the economic outlook and FOMC policies. At the same time, this week we will have heavy economic data including GDP, CPI, Retail Sales, BOJ meeting, and ECB monetary policy statement while earning reports will be much important to follow. Let`s review the most important data in the week ahead.
Chinese GDP - Monday
As one of the economy’s most important data, especially from the biggest global factory, Q4 2021 GDP will be very important for the market participant and investors to know how the economy will perform in the first quarter and what they have to expect from their investments. Chinese Q4’s GDP is expected to slow down at 3.6% from 4.9% annually. However, the economic outlook for China remains uncertain amid its "Zero COVID" policy and its impact on its real estate industry. This weakness in the data and expected return of the US dollar, supposed to put the Chinese Yuan in a weaker position against the US Dollar.
BoJ Monetary policy meeting - Tuesday
The bank of Japan`s meeting will be the first major central banks` monetary policy meeting in 2022. Japanese started to have some transformations in their economic policies, including increasing the tax for higher incomes, less support for the larger firms, and extending the supports of smaller companies and businesses. Wages in Japan almost did not change since 1991, and now BoJ will try to start increasing the rates in line with increasing the wages, hoping they can create some sort of inflation and encourage the buyers. The expected policy is not dovish or hawkish, it is different and supposed to help the Nikkei 225, to stop its downtrend and move higher slowly!
US Housing data - Wednesday & Thursday
Housing starts and existing Home Sales numbers, both expected to ease a little bit in December. In November, the total housing inventory tumbled nearly 10% to 1.11 million units, besides that we had fast increased prices, with an almost 14% annual increase in November. These reasons with material and labor shortages are the mail reasons to expect a little bit of weakness in December numbers. However, annual numbers show a strong increase in 2021, as demand has remained strong. Expected numbers, supposed to help the US stock markets` positive sentiment, and lift the US dollar as well.
Inflation numbers, all across the world!
Last week we had US and China inflation data, and both decrease the worries on the future of this fast price rise in 2021. This week, we will have the data from other major economies, including Italy and Eurozone on Monday. UK, Germany, and Canada on Wednesday, with Japanese inflation numbers on Friday. Consensus predictions show that in most developed economies, inflation is softening in December, as it was confirmed in the US and China last week. This overall reduction of inflation concerns can increase the overall positive outlook of the 2022 GDP.
Earnings Reports and another hot week!
Last week started with positive reports from Delta Airlines and major US banks. This week`s earnings reports also will start with Bank of America, Charles Schwab, and Goldman Sachs on Tuesday. UnitedHealth, Procter & Gamble, Morgan Stanley, and United Airlines Holdings also reporting on Wednesday. Thursday, we have to watch the Netflix and American Airlines` reports. And this week`s reports will conclude with IHS Markit Lt report on Friday.