The important economic news, that will drive the markets this week

Global financial markets will focus on a key batch of U.S. economic data in the week ahead, with Friday's inflation report in the spotlight, for further clues on the timing of the next Federal Reserve rate hike.

China is to release monthly trade and inflation data amid recent signs that momentum in the world's second largest economy remains strong.

In the U.K., traders will be awaiting a report on manufacturing production for further indications on the continued effect of Brexit on the economy.

China Trade Figures, Wednesday - 03:30
China is to release December trade figures on Thursday. The report is expected to show that the country’s trade surplus narrowed to $37.00 billion last month from a surplus of $40.21 billion in November.

Exports are forecast to have climbed 9.1% in December from a year earlier, following a jump of 12.3% in the prior month, while imports are expected to rise 13.0%, after increasing 17.7% in November.

Additionally, on Tuesday, the Asian nation will publish data on December consumer and producer price inflation. The reports are expected to show that consumer prices rose by an annualized 1.9% last month, while producer prices are forecast to increase by 4.8% on a year-over-year basis.

U.K. Manufacturing Production, Wednesday - 11:30
The Office for National Statistics is to produce data on U.K. manufacturing production for November at 0830GMT (4:30AM ET) on Wednesday, amid expectations for an increase of 0.3% following an increase of 0.1% in the preceding month. Industrial output is forecast to rise 0.4%, after a flat reading in October.

At its December meeting the Bank of England said that Brexit remains the most important influence on, and source of uncertainty about, the British economy right now.

U.S. Inflation Reading, Friday - 15:30
The Commerce Department will publish December inflation figures at 8:30AM ET (1330GMT) Friday. Market analysts expect consumer prices to rise 0.2%, while core inflation is also forecast to rise 0.2%.

On a yearly base, core CPI is projected to climb 1.7%. Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.

Rising inflation would be a catalyst to push the Fed toward raising interest rates.

At the same time on Friday, the Commerce Department will publish data on retail sales for December. The consensus forecast is that the report will show retail sales increased 0.5% last month. Core sales are forecast to rise 0.4%.

Fed Speakers
The minutes of the Fed’s December meeting showed that officials generally agreed that interest rates should continue to rise in 2018, but policymakers expressed a range of views about the frequency of future hikes.

While investors expect the central bank to keep monetary policy unchanged at its January meeting they will tune into Fed speakers this week for fresh indications on the number of rate hikes this year.

Fourth Quarter Earnings
Fourth-quarter earnings season gets underway with eight companies on the S&P 500 due to report results this week. Investors are betting on a string of solid earnings reports to justify last year’s stock market rally.

Banks will get the ball rolling with Wells Fargo (NYSE:WFC) and JPMorgan (NYSE:JPM) reporting results on Friday.

Source: Bloomberg Pro Terminal

Jr Trader Alexander Kumanov

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