In the first week of the New Year, the U.S. dollar continued to remain under pressure. However, the greenback did not really experience a collapse. In fact, the currency even made an attempt to recover after the release of the encouraging ISM Manufacturing PMI data and as the FOMC minutes did not contain any kind of discouraging statements. However, the positivity did not last for a very long time as the nonfarm payroll reading missed analysts’ expectations. This is because only 148,000 new jobs were added whereas the market expected 189,000 job additions. Wages continued to remain at the 2.5 percent rate on a year-on-year basis. The EUR stood out as the currency continued to challenge the highs. On the other hand, the GBP just managed to stay afloat amidst the release of mediocre PMI data. On the oil front, the prices continued to rise. However, the Canadian dollar failed to register a big move.
Inflation and retail sales figures from the U.S. are the major releases scheduled for the upcoming week. There are other important releases from other parts of the world as well. Here is an outlook on the some of them:
#1: Bank of Canada Business Outlook Survey (01/08/2018 Monday 15:30 GMT)
Released on a quarterly basis, this highly respected report provides forecasts about future economic conditions. This is because the firms for the survey are selected on the basis of their contribution to the GDP of the nation. The report is considered as a leading indicator of the nation’s economic health. Businesses respond quickly to changes in market conditions. Therefore, changes in business sentiment provide indications about the economic activity such as hiring, spending, and investment in the future.
#2: U.K. Manufacturing Production (01/10/2018 Wednesday 09:30 GMT)
In the U.K., the manufacturing production rose by just 0.1 percent in the month of October, slowing down from the 0.7 percent gain reported in the previous month. However, the figure matched analysts’ expectations. On a year-on-year basis, manufacturing production grew 3.9 percent, following the 2.7 percent growth recorded in September. The year-on-year reading was also in line with analysts’ expectations. This is the biggest yearly increase in manufacturing output in 2017. This was mainly attributed to a 9.3 percent increase in transport equipment production. Forecast for November: 0.3 percent increase
#3: U.S. Crude Oil Inventories (01/10/2018 Wednesday 15:30 GMT)
In the U.S., crude oil stocks declined by 7.419 million barrels during the week that ended on December 29 after the stocks fell by 4.609 million barrels in the prior week. The reading for the current week was much higher than the analysts’ expectation for a drop of 5.148 million barrels. With this, the crude oil stocks in the U.S. have declined for the seventh week consecutively. This is the largest decline since the decrease reported for the week ending August 11, 2017. Meanwhile, the gasoline stocks rose by 4.813 million barrels, following the 0.591 million barrels rise in the prior period. The reading came in above analysts’ expectation for an increase of 2.182 million barrels.
#4: Australia Retail Sales (01/11/2018 Thursday 00:30 GMT)
In Australia, retail sales increased by 0.5 percent on a month-on-month basis in October last year after the figure for the previous month was rev upwardly revised upward to 0.1 percent gain. Analysts had expected the retail sales to rise by 0.3 percent. Sales increased at the fastest pace since May last year, driven by cafes, takeaway food, and restaurants; household goods; and footwear, personal accessories, and clothing. Forecast for November 2017: 0.4 percent increase
#5: U.S. PPI (01/11/2018 Thursday 13:30 GMT)
In the U.S., the producer prices for final demand goods rose by 0.4 percent on a month-on-month basis in November last year at the same pace as two previous months. However, the reading for November came in above analysts’ expectation for a 0.3 percent increase. The prices of goods rose by 1.0 percent, following the 0.3 percent increase recorded in October mainly because of the gasoline price increase. The services cost, on the other hand, increase at a slower pace of 0.2 percent compared to the 0.5 percent jump in October. On a year-on-year basis, the producer prices for final demand goods jumped 3.1 percent. This is the highest gain since January 2012 and it followed the 2.8 percent increase in October. Forecast for December 2017: 0.2 percent
#6: U.S. CPI and Core CPI (01/12/2018 Friday 13:30 GMT)
Consumer prices in the U.S. rose by 0.4 percent on a month-over-month basis in November last year, faster than the 0.1 percent increase in the month of October. The reading for November was in line with analysts’ expectations. The increase in energy index accounted for approximately 75 percent of the increase of all items. The gasoline index and other energy component indices also increased.
According to the Labor Department, the core CPI, which excludes the volatile energy and food prices, rose by 0.1 percent after registering an increase of 0.2 percent in the month of October.
Both CPI and core CPI are expected to increase by 0.2 percent in the month of December.
#7: U.S. Retail Sales and Core Retail Sales (01/12/2018 Friday 13:30 GMT)
In the U.S., the retail sales increased by 0.8 percent on a month-over-month basis in the month of November after the reading for the previous month was revised upward to represent an increase of 0.5 percent. The reading for November beat analysts’ expectation for an increase of 0.3 percent. The increase in sales could be attributed to the stat of the holiday shopping season in the month of November. Sales rose for most categories other than autos and general merchandise stores.
Excluding automobiles, building materials, gasoline, and food services, the retail sales in the U.S. increased by 0.8 percent in November after rising 0.4 percent in the month of October.
It is expected that the retail sales and core retail sales will increase by 0.4 percent and 0.5 percent, respectively.