There is much riding on next week’s BoJ meeting, with the Yen the biggest gainer of the week amid speculation of an early policy reset in Japan as the BoJ struggles to keep a lid on yields. The World Economic Forum in Davos, Switzerland, kicks off next week as well. The economic agenda contains Inflation figures from UK, Canada, UK & Australian labour data and US PPI.
Have a look at the most important events of the coming days in our usual weekly publication.
Monday – 16 January 2023
World Economic Forum – Full Week – The Davos WEF kicks off attended by central bankers, prime ministers, finance ministers, trade ministers, and business leaders from over 90 countries. US Markets are close – Martin Luther King, Jr. DayTuesday – 17 January 2023
Consumer Price Index and Core (CAD, GMT 13:30) – Canada CPI is expected to be 6.40% by the end of the quarter, according to Trading Economics’ global macro models and analyst expectations. In the long-term, the Canada Inflation Rate is projected to trend around 2.50% in 2023 and 2.00% in 2024.
Wednesday – 18 January 2023
Interest Rate Decision, Statement and Conference (JPY, GMT 03:00) – The BoJ stepped in with additional bond purchases, and since the last meeting the speculation of an early policy shift is mounting. Traders are starting to position for an early policy shift, after the Yomiuri newspaper said the central bank will consider policy adjustments, to address turbulence prompted by last month’s tweak. The rise in the yield prompted an announcement of another round of unscheduled debt purchases. Consumer Price Index (GBP, GMT 07:00) – The latest BoE survey on inflation expectations, showed the projected rate rising to 7.4% in December from 7.2% in the previous month. Despite this week’s expansion of UK activity and better than expected GDP, still the risk of a more prolonged recession in the UK is pretty high, as the domestic economy is struggling and the impact of Brexit is adding to problems for the export sector. Producer Price Index (USD, GMT 13:30) – December PPI figures are anticipated unchanged for the headline and 0.2% for the core, following respective gains of 0.3% and 0.4 in November. As expected readings would result in the y/y headline PPI metric easing to 6.8% from 7.4%, versus an all-time high of 11.7% in March. Overall, the massive PPI climb since the start of 2021 exceeded the uptrend in headline and core CPI data, and both sets of gains have chased outsized increases in the trade price measures. Now as prices unwind, the trade price measures are falling sharply, with ensuing weakness in PPI and CPI that should extend into 2023. We expect sharply moderating y/y gains for all the major metrics in early-2023.Thursday – 19 January 2023
Friday – 20 January 2023
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Andria Pichidi
Market Analyst
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