UK and US CPI rates, Germany’s and Japan’s GDP as well as Australia’s Employment Data in focus.
Next week’s market movers
- • In the UK and the US, we expect the release of the inflations data to draw attention.
- • The German and Japanese GDP figures on Wednesday could also move the markets somewhat.
- • On Thursday, the focus may be shifted to Australia’s Employment data release.
On Monday, no major events are expected.
On Tuesday, during the European morning, UK’s inflation data are to be released for January. The headline CPI rate is forecasted to decelerate +2.90% on a year on year basis from the previous reading of +3.00%. The core CPI rate is forecasted to accelerate to +2.6% on a year on year basis from the previous reading of +2.5%.
There may be some mixed signals here for the GBP, however, we also see the case for Thursday’s BoE inflation forecasts to have influenced market expectations. Hence, should the headline CPI rate decelerate as forecasted, GBP could weaken as a possible future rate hike may be pushed a bit further into 2018.
On Wednesday, early in the Asian morning, we get Japans preliminary GDP growth rate for quarter 4 (Q4). The indicator is forecasted to slow down to +0.2% on a quarter on quarter (QoQ) basis from the previous reading of +0.6%. Such a marked decrease could weaken the JPY. Later on, in the European morning, we get Germany’s preliminary GDP growth rate for Q4. The rate is forecasted to have also slowed down to +0.6% on a quarter on quarter basis compared to the previous reading of +0.8%. The EUR may weaken as the market may be disappointed by the deceleration of the GDP growth rate. At the same time, Eurozone’s preliminary GDP growth rate for Q4 will be released and is forecasted to remain unchanged at +0.6% on a quarter on quarter basis. Hence the effect on the EUR may be somewhat muted.
Last but not least, in the US session, we get the US inflation data for January. Headline CPI rate is forecasted to remain unchanged at +2.1% on a year on year basis as well as the core CPI rate is forecasted to remain unchanged at +1.8% on a year on year basis. USD could experience some strengthening as the stable CPI rate may strengthen the argument for a possible FOMC rate hike in March.
On Thursday, during the Asian morning, we get Australia’s employment data for January. The unemployment rate is forecasted to tick down to 5.4% from previous reading of 5.5% and employment change is forecasted to drop to 9.0K from the previous reading of 34.7K. Despite a reduced number, the employment change is still with a positive sign and if seen in conjunction with the slowing of the unemployment rate could support the AUD somewhat.
On Friday, no major events are expected.
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