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- What to expect next week: 22.01 – 26.01.2018
What to expect next week: 22.01 - 26.01.2018
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Loading...After what is expected to be a calm economic calendar for Monday, investors will monitor the decision on interest rates from the central bank of Japan on Tuesday morning. The market expectations are that the bank will not signal a change in its monetary policy, but sharp yen moves are possible, as it is still unclear what the BoJ speakers will call on the future of interest rates in the country. JPY still remains strong against the dollar after Japan announced it cuts government bond purchases. The bank has said that this is not a long-term solution and we can soon expect deeper cuts in the program for quantitative easing. Such steps will continue to have a positive impact on the yen, not excluding a short-term adjustment to the Nikkei 225.
For the rest of the week, market participants will focus on UK and US inflation reports as well as Canada and Nova Zealand's GDP. The Central Bank of Canada raised interest rates last week due to strong economic data in the country, so traders would expect the economy to expand. Lower than expected reading may have a negative effect on CAD.
A meeting of OPEC and Russia will be held over the weekend. As oil is traded close to a three-year high while global stocks are declining, many traders and investors are wondering if OPEC will take a step towards ending the cut program. Russian Energy Minister Alexander Novak said the summit in Oman would most likely end with a decision to phase out the program. Since the Canadian currency is directly related to oil, any surprise from the meeting may have an impact on its price.
Gold’s blistering rally seems to have gone flat, yet tailwinds can be found in both the physical and paper markets. Gold often does well in January and February, which is when demand spikes as China gears up for the Lunar New Year and its traditional gifts of the precious metal. While technical indicators point to a rally that may have grown tired, options traders are betting on at least another month of rising prices. Buying gold in yen, euros and pounds has yielded less than purchases in dollars in the past month due to the weakness of the greenback. But the fact that bullion is up in all these reserve currencies shows there’s intrinsic strength in its rally. This could be because of concerns that either global inflation is on the rise or a correction in the stock markets may be imminent.
A crucial vote in Germany on Sunday has the potential to derail stability in Europe and send the euro tumbling. The continent's largest economy has been without a formal government for four months with long-term chancellor Angela Merkel unable to secure a ruling coalition. The euro has enjoyed a stellar run of late, rising almost 4 percent versus the dollar over the last three months. It currently sits at around $1.22, marking a three-year high. That run, while aided in no small part by dollar weakness, has been seen as a reflection of thumping euro zone data and relative stability among EU members. Rejection threatens to lead to either a minority government in Berlin or to new elections. Both are not good for the euro simply because they would create uncertainty. In a note Thursday, Morgan Stanley's European FX team wrote that Sunday's vote is the "key potential near-term risk" for unwinding the recent upward run for the euro.
The Business Administration Department of the People's Bank of China (PBoC) has reportedly issued a document today requiring payment providers in Beijing to stop facilitating cryptocurrency trading activities. Citing sources familiar with the matter, the news source said the document also requires these companies to report on their investigation and implementation by Jan. 20. It remains unclear at this stage what immediate impact this may have on China's remaining cryptocurrency trading activity. Following the ban on initial coin offerings by the PBoC last year, China's cryptocurrency exchange activities have mostly shifted to over-the-counter (OTC) trading. The earnings calendar starts to heat up next week, but most of the high flyers won't be released until later in the month / early February.
Earnings calendar for next week:
Monday: Netflix, UBS, Halliburton
Tuesday: Johnson & Johnson, United, Travelers, Verizon
Wednesday: United Technologies, GE, Ford, Royal Caribbean
Thursday: Intel, Caterpillar, 3M, Starbucks, American Airlines
Friday: Honeywell, Colgate-Palmolive
Economic calendar for the week 22.01 - 26.01.2018
Monday
15:30 USA - Chicago Fed National Activity Index
Tuesday
06:00 Japan - BoJ Interest Rate Decision
12:00 Germany - ZEW Economic Sentiment
17:00 Europe - Consumer Confidence
Wednesday
07:00 Japan - Leading Economic Index
10:55 Germany - Markit Services PMI
11:00 Europe - Markit Services PMI
11:30 UK - Average Earnings + Bonuses
16:00 USA - Housing Price Index
16:45 USA - Markit Services PMI
23:45 New Zealand - CPI
Thursday
09:00 Germany - Gfk Consumer Climate
11:00 Germany - Ifo Business Climate Index
15:30 Canada - Retail Sales
15:30 Europe - ECB Press Conference
17:00 USA - New Home Sales
Friday
01:30 Japan - National Core CPI
11:30 UK - GDP
15:30 Canada - CPI
15:30 USA - GDP
20:00 USA - Baker Hughes Oil Rig Count
22:30 USA - CFTC Speculative Net Positions
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