In the upcoming week, the fourth-quarter earnings announcements will be continued with companies like IBM, Netflix, Intel, and P&G set to release reports. Further, flash PMI survey results from the Euro Area; interest rate announcement by central banks from the Euro Area, Japan, and Canada; and China’s fourth GDP figures are scheduled to be released. Having said that here is an outlook on a few key releases:
#1: China GDP (01/18/2021 Monday 02:00 GMT)
China’s GDP advanced 4.9 percent on a year-on-year basis in the third quarter of last year, faster than the 3.2 percent expansion reported in the prior quarter. However, the reading for the period came in below analysts’ expectations for a 5.2 percent growth. In spite of the lower-than-expected reading, the indications are that the expansion is extending to consumption following the state-backed industrial recovery. Retail trade rose 3.3 percent year-on-year in the September quarter, above analysts’ expectations, to register the highest reading to date. Industrial production rose 6.9 percent, higher than analysts’ expectations, and the biggest increase in 2020. Rising global demand for work-from-home technology and medical equipment boosted exports. Government support such as increased fiscal spending, slashing of lending rates, and the reserve requirements of banks and tax relief has also contributed to the recovery.
Forecast for the fourth quarter of 2020: 6.2 percent
#2: Canada BoC Monetary Policy Report (01/20/2021 Wednesday 15:00 GMT)
The Monetary Policy Report of the Bank of Canada provides valuable insight into the central bank’s view of economic conditions and inflation. These are the key factors that are considered for deciding the interest rates and monetary policy. The Report is released on a quarterly basis and if its tone is more hawkish than expected, it is good for the Canadian currency.
#3: Canada BoC Rate Statement (01/20/2021 Wednesday 15:00 GMT)
The Bank of Canada releases the Rate Statement eight times a year. The Central Bank uses it as its primary tool for communicating with investors as regards the monetary policy. It provides the outcome of the members’ decision on setting interest rates and commentary on the economic conditions that impacted their decision. More importantly, it projects the nation’s economic outlook and offers clues on future decisions.
#4: Canada BoC Press Conference (01/20/2021 Wednesday 16:15 GMT)
The Governor of the Bank of Canada holds a press conference on a quarterly basis, approximately 75 minutes after the announcement of the interest rate, to discuss the contents of the Monetary Policy Report. There are two parts to the press conference: reading a prepared statement and answering questions posed by the press representatives. As the questions can lead to unscripted answers, heavy market volatility can be expected.
#5: United States President-Elect Biden Speaks (01/20/2021 Wednesday Tentative)
President-Elect Joe Biden is scheduled to speak at the 59th Presidential Inauguration in Washington DC.
#6: Australia Employment Change (01/21/2021 Thursday 00:30 GMT)
Australia added 90,000 jobs in November last year, well above analysts’ expectations for an increase of 50,000 jobs, reflecting the strengthening of Victoria’s labor market. While full-time employment jobs rose 84,200), part-time employment rose by 5,800.
Forecast for December 2020: 50,000
#7: Unemployment Rate (01/21/2021 Thursday 00:30 GMT)
On a seasonally adjusted basis, the unemployment rate in Australia came in at 6.8 percent in November last year, down from October’s reading of 7.0 percent. This is the lowest unemployment rate since August as the economy started recovering from the impact of COVID-19. The number of unemployed people in the country declined to 942,100. While people looking for full-time work declined to 673,000, those looking for part-time work increased to 269,100. The participation rate jumped to 66.1 percent, the highest in as many as ten months, from 65.8 percent in October. Analysts had expected the participation rate to come in at 66.0 percent.
Forecast for December 2020: 6.7 percent
#8: Japan BoJ Outlook Report (01/21/2021 Thursday 03:00 GMT)
The quarterly Outlook Report released by the Bank of Japan in October last year showed that the nation’s economy is likely to improve with the resumption of the economic activity and the gradual waning of the impact of the disruptions caused by the COVID-19 pandemic. However, the Central Bank expects the pace of growth to remain moderate as the vigilance against COVID-19 continues. When the impact of the novel coronavirus subsides globally and the overseas economies return to the growth path, the Japanese economy will improve further.
#9: Japan BoJ Monetary Policy Statement (01/21/2021 Thursday 03:00 GMT)
Scheduled to be released eight times a year, the Bank of Japan uses the Monetary Policy Statement as the primary tool to communicate with investors as regards the monetary policy. It provides the outcome of the members’ decisions on asset purchases. In addition, it provides commentary on the economic conditions that impacted their decision. More importantly, it projects the nation’s economic outlook and provides clues on future decisions.
#10: Euro Area ECB Monetary Policy Statement (01/21/2021 Thursday 12:45 GMT)
The European Central Bank releases the Monetary Policy Statement eight times a year and usually makes slight changes to the statement at each release. Traders focus on these changes. The Central Bank uses the statement as the primary tool for communicating with investors as regards the monetary policy. It provides the outcome of the members’ decision on setting interest rates and commentary on the economic conditions that impacted their decision. More importantly, it projects the nation’s economic outlook and provides clues on future decisions.
#10: Euro Area ECB Press Conference (01/21/2021 Thursday 13:30 GMT)
The President and Vice President of the European Central Bank hold a press conference approximately 45 minutes after the announcement of the Minimum Bid Rate. The press conference has two parts: reading a prepared statement and answering questions posed by the press. As the questions can lead to unscripted answers, heavy market volatility can be expected.
#11: United Kingdom BoE Governor Andrew Bailey Speaks (01/21/2021 Thursday 17:00 GMT)
Andrew Bailey, Governor of the Bank of England, is scheduled to speak at a virtual conference “Citizens’ Panel Open Forum” hosted by the Central Bank. Audience questions expected.
#12: New Zealand CPI (01/21/2021 Thursday 21:45 GMT)
In New Zealand, consumer prices increased 0.7 percent on a quarter-on-quarter basis in the September quarter of last year, recovering from the 0.5 percent decline in the prior period. However, the reading for the period came in below analysts’ expectations for a 0.9 percent increase.
Forecast for the fourth quarter of 2020: 0.2 percent
#13: France Flash Services PMI (01/22/2021 Friday 08:15 GMT)
In France, the Services PMI rose to the 49.1 level in December from the 38.8 level in the prior month. However, the final reading came in slightly below the preliminary estimate of 49.2. The reading for the month pointed to the slowest contraction in the services sector in the recent four-month sequence of decline. Despite a rise in new orders, driven by increased spending on advertising campaigns, business activity continued to shrink. The reduction in exports was the least in as many as ten months. Staffing levels remained broadly unchanged after the nine-month decline sequence. Input costs increased for the very first time in as many as six months and at the fastest rate since August, driven by salary increases. Average output charges were reduced again though at the slowest pace in as many as four months. Sentiment strengthened to the highest level ever since April 2019, supported by expectations that demand will recover following the easing of the restrictions related to COVID-19.
Forecast for January 2021: 49.1
#14: Germany Flash Manufacturing PMI (01/22/2021 Friday 08:30 GMT)
In Germany, the Manufacturing PMI reported by IHS Markit/BME was revised downward to the 58.3 level in December from the preliminary reading of 58.6. The reading for the period pointed towards strong growth in manufacturing activity since February 2018 as the nation continued to recover from shutdowns related to the coronavirus pandemic in 2020. Production rose at a reduced rate. Goods producers were optimistic about the outlook for the year ahead. However, the factory workforce numbers continued to decline. Further, an increased manufacturing supply chain strain led to an increase in cost pressures. Finally, December’s survey report showed high expectations among manufacturers with respect to output in the coming year.
Forecast for January 2021: 57.3
#15: Germany Flash Services PMI (01/22/2021 Friday 08:30 GMT)
In Germany, the Services PMI reported by IHS Markit was revised downward to 47.0 in December from the preliminary reading of 47.7. In November, the index stood at 46.0. The reading pointed to a fall in services activity for the third straight month because of ongoing lockdown measures for curbing the spread of the COVID-19 pandemic. The decline in services activity was slightly lower than in the previous month and largely restricted to consumer-facing sectors. Activity fell sharply in restaurants and hotels and other sectors including leisure and recreation. Business confidence edged higher with service providers expressing optimism and a slight increase in employment.
Forecast for January 2021: 45.1