Week Ahead – Jan 22nd
1/19/2024 6:02:32 PM
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.