The Forex Week Ahead January 8th-12th
Forex Week Ahead North America concentrated data risk on Friday and a fresh assessment of the voting bias of this year’s crop of voting regional Federal Reserve Bank Presidents will be the main focal points next week. The end results of the holiday shopping season and fresh evidence on the trend in core inflation will arrive simultaneously on Friday morning. The dollar value of retail sales for Dec could get a bit of a lift from a combination of a 2%+ MoM rise in new vehicle sales that carry about a one-fifth weight, higher expected prices for retail goods and an expected rise in core sales ex-autos and gasoline. The main risk in the CPI print on Friday will be whether the small dip in core inflation during November was an aberration or not. This will be a heavy week for Fed speak with all of the emphasis placed upon regional Fed Presidents. The incremental information may further inform an understanding of whether this year’s voting regional Presidents are more hawkish than last year’s. That’s because four out of five of this year’s voting Presidents will speak, including NY President Dudley (retiring mid-2018), Cleveland’s Mester, Atlanta’s Bostic and San Francisco’s Williams. The NY Fed’s EVP and Head of the Markets Group Simon Potter also speaks and he is among the candidates to replace President Dudley. Alternate voters will also speak including St. Louis President Bullard, Boston’s Rosengren and Chicago’s Evans. Dovish but nonvoting Minneapolis Fed President Kashkari also speaks.
Europe for the most part, the focus will be upon second- and third-tier data releases that will inform Q4 growth tracking risks on the path to the release of Q4 Eurozone GDP on January 30th and Q4 UK GDP on January 26th. At present, consensus estimates Q4 UK GDP at 0.3% q/q in seasonally adjusted and nonannualized terms which would be in line with the readings of the past year during which quarterly growth noticeably slowed from the 0.5–0.7% pace over most of 2016. The week’s reports will be mainly focused upon trade figures from France, Germany and the UK, industrial production estimates for November in the UK and Eurozone, as well as German factory orders in November. On Thursday, the Bank of England also releases its latest Credit Conditions and Bank Liabilities Surveys while the ECB releases the account of its December 14th meeting.
Asia a very light Japanese economic calendar. the key Japanese data is likely the Nov labour cash earnings, the lack of data should leave the yen’s moves driven by broader global market sentiment and by any shifts in U.S. Treasury yields. Higher U.S. yields would likely keep the yen pressured against the greenback