High Impact Economic Data for the upcoming week (All Times GMT+2)

Week Ahead - Jan 11-16

We are moving into the second full week of January having navigated a strong US NFP last week. The US economy added 252 000 jobs for December and the Unemployment Rate fell from 5.8% to 5.6% in a positive surprise for US investors. While global data remains important the main talking point for the next two weeks is likely to be the Greek elections with a significant possibility that Greece could exit the European Union or at least initiate changes in its bailout program with a shift from austerity to growth. Particularly if the right-wing party Syriza sweeps to power with a full mandate by the Greek electorate.

On Monday there is no high impact data and the markets will be following on from Friday's trading where the main events were the end of the terror siege in France and the encouraging employment data from the United States. Tuesday Chinese Trade Balance data is expected to reveal small drop in the trade surplus from $54.5B to $49.8B in a sign that the Chinese export machine may be slowing down. In the UK CPI data is expected to decline to 0.7% y/y from 1.0% last month and is moving too low for the Bank of England inflation target of 2%, this will allow the BOE to remain accommodative for longer. On Wednesday the European Court of Justice Ruling is set to announce the verdict with regard to the European fiscal union and may outline a legal framework for EU stimulus and support programs. Then attention shifts to the Core Retail Sales and Retail Sales figures in the US. Retail Sales are the most important consumption indicator for the world's largest economy and the data is set to show further growth of 0.1% in the core number. Over in Australia on Thursday employment data is on the calendar as the Employment Change is forecast to show that the economy added 5300 new jobs last month and the Unemployment Rate set to stay at 6.3% unchanged. US PPI, Unemployment Claims and the Philly Fed Manufacturing Index all point to weaker results than last publication. On Friday the attention shifts to inflation data in the US with CPI and Core CPI on the agenda. The CPI figures that include fuel and food are expected to fall by a further -0.3% following the same size decline last month, this is reasonable considering the large declines in Crude Oil and Agricultural commodities in over the last six month. The Core CPI will increase by 0.1% driven by higher retail prices according to analysts and the week closes out with markets looking for an increase in the Preliminary UoM Consumer Sentiment data from 93.6 to 94.2.

Events to Watch this Week

The main factors that will affect the fx markets and trends next week will be the:

  • EURUSD reached a new low last week at 1.1754. This level is a 10yr low on the pair and the euro has been in freefall in recent months. Can the Euro bounce back and reclaim some credibility, or will it continues to lose value? Lots of attention will be on the Greek election and success by Syriza is the main cause of concern for the EU currency.
  • Crude Oil is trading just off the lows of $46.85 a barrel. The current price is at $47.15 and new lows could cause panic in oil markets, oil stocks and particularly shale gas companies. Further declines in oil will aid the USD and punish the currencies of net oil exporting counties. Likely to be affected amongst the majors are the CAD and AUD if commodity prices retreat.