Week Ahead – Jan 22nd

Week Ahead – Jan 22nd

It will be an important week in the US, with investors closely monitoring the advance estimate of Q4 GDP growth rate, PCE Price Indexes, and personal income and spending. Additionally, attention will be directed toward durable goods orders, Manufacturing and Services PMIs, and new and pending home sales. The earnings season is set to enter full swing, featuring reports from major industry players like Microsoft, Tesla, Visa, J&J, P&G, Netflix, Intel, T-Mobile, Verizon, Abbott, IBM and Amex. On the global stage, interest rate decisions will be made in the Euro Area, Japan, Canada, Turkey, Norway, South Africa, and Malaysia. Also, manufacturing and Services PMIs will be closely watched in Australia, Japan, France, Euro Area, and the UK. Furthermore, Germany will release of the Ifo Business Climate and GFK Consumer confidence indices, while Australia will present the NAB Business Confidence.

Anna | anna@tradingeconomics.com 1/19/2024 6:02:32 PM

In the United States, the center stage will be taken by the advance estimate of Q4 GDP growth, along with December's personal outlays and income, and durable goods orders. The US economy is expected to have expanded at an annualized rate of 1.8% in Q4, reflecting a significant slowdown from the 4.9% growth in the previous quarter. Additionally, core PCE prices are anticipated to have risen by 0.2% in December, a slight increase compared to the 0.1% gain seen in November. The report is also expected to reveal a 0.2% increase in personal spending and a 0.3% advance in income. Finally, durable goods orders are likely to have risen by 0.5%, following a 5.4% surge in November, which was the largest increase since July 2020. Investors will also closely monitor the flash S&P Global PMI survey, new and pending home sales, the Chicago Fed National Activity Index, and the advance estimates of wholesale sales and the goods trade balance. The fourth-quarter earnings season will be in full swing, featuring reports from major companies, including American Express, Johnson & Johnson, Procter & Gamble, Intel Corp, IBM, Netflix, Tesla, AT&T, Blackstone, 3M, General Electric, Verizon, Intuitive Surgical, Visa, and ServiceNow. Elsewhere in America, the Bank of Canada is likely to maintain interest rates at current levels as inflation remains well above policymakers' targets, and the labor market gradually cools. Canada's housing prices, as well as Mexico's foreign trade and unemployment figures, will also be in the spotlight.

In Europe, the European Central Bank is expected to keep interest rates unchanged, but investors will closely scrutinize the accompanying statement for insights into the central bank's assessment of economic conditions and any potential future policy shifts. Interest rate decisions are also on the agenda in Turkey and Norway. On the macroeconomic front, Flash PMI data is anticipated to show that the Eurozone economy, including Germany and France, experienced a reduced downturn in early 2024, driven by softer declines in both the manufacturing and service sectors. Additionally, consumer morale across the Euro Area is poised to improve, reaching the highest level since February 2022. In Germany, the Ifo business climate indicator may see a slight increase, while GfK consumer confidence is expected to dip from a five-month high. In France, consumer sentiment is projected to reach a nearly two-year high, while business sentiment to remain steady at a five-month high. In the United Kingdom, the Flash PMI survey is expected to reveal a smaller contraction in manufacturing activity and the strongest growth in services in seven months. Investors are also keeping a close eye on CBI gauges for factory orders, business optimism, distributive trades, as well as public sector net borrowing in the UK.

In Asia, the People’s Bank of China is expected to hold its one-year and five-year loan prime rates unchanged, consistent with the unexpected hold of its medium-term lending facility rate as the central bank opted to forgo further monetary easing to support the yuan. Also on the monetary policy front, the Bank of Japan is expected to hold its key interest rate unchanged and refrain from signaling any changes to its yield curve control policy, after the most recent headline and core inflation rates fell to multi-year lows. Investors also await December’s trade balance and January’s PMI figures. Elsewhere, South Korea will release its fourth-quarter GDP figures while Malaysia is set to decide on its policy rate and divulge December’s inflation print. In Australia, investors await December’s NAB business confidence gauge and PMI figures for January, while New Zealand will share its fourth-quarter CPI.


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