Heavy economic data!
After the banking storm and a light week, we will have a week ahead with heavy economic data, with UK and Australian employment, and Retail Sales and Inflation numbers from most developed economies. After last week's inflation numbers in the United States, other data from Europe and this week’s numbers, we will be able to realize how central banks should react to the current economic situation, and concerns. Let's check the most important events and data of the week.
UK Retail Sales and employment data - Tuesday & Friday
Last week UK GDP for the 2021 fourth quarter confirmed the weakness in the economic situation. At the same time, December employment data was optimistic and shows that even if it is slow, still moving forward. This week both Employment and Retails Sales are expected to increase to leave the arguments for further BoE tightening moves in the coming months. Unemployment On Tuesday is expected to stay unchanged at 4.1%, and Friday's Retail Sales are forecasted to grow by 0.6%. Expected numbers will help the UK Stock Markets.
US Retail Sales - Wednesday
December Retail Sales numbers came as a real shock to us. During December, total sales fell 1.9% while excluding spending on autos and gas, sales fell 2.5%. We can bring two reasons for that, early holiday shopping in November and increasing prices, which has reduced people's purchasing power. On the other hand, the latest labor market data confirm the increasing job numbers and average earnings, and it means that we can expect better numbers for January. The overall expectation is a 1.2% gain in Retail Sales. Since in 2022 economy mostly will depend on consumer spending, these data will be very important for market participants. These numbers will help the US dollar index to increase more.
Canadian CPI - Wednesday
With increasing energy prices, consumer inflation in Canada also increased by 4.8% in December. And now, with 5.0% expected increasing inflation in January, we can give more chances to BoC rate hike in its next meeting to control the inflation, and repeat it a few more times over the year, as well as in 2023. Current expected inflation numbers will help the Loonie to stay steady against US Dollar.
US Housing numbers - Thursday
Despite ongoing supply disruption, the pace of residential construction remains fairly strong with total housing starts rising 1.4% in December to a 1.702 million-unit annual pace. Details numbers show that in the past months and even years, single-family houses growth is decreasing as a result of stay home orders of the pandemic. Since most related issues are decreasing and other economic factors are improving, we expect to see a small improvement in January, with overall construction starts rising to a 1.705K unit pace during the month.
Japanese inflation - Thursday
Unlike the other developed and developing economies, inflation in Japan is still well below the central bank's targets. For January's data, we are again expecting to see lower numbers and it means that BoJ still will hold its current policies. And while other central banks around the globe tighten their policies, it means more pressure on the Japanese yen. Divergences in the central banks' monetary policies, should hold the pressure on the Yen in 2022. Thanks for being with us, hope this week will be an amazing week for you
