Weekly Outlook, Jan. 10–14, 2022: Top Economic Events to Watch This Week

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Top Economic Events

Top Economic Events: The broad-based US dollar struggled to halt its decline of the previous-session and is expected to close the week on a gloomy note. The dollar was lower in Asia on Friday morning, but it was still on track for a fifth consecutive weekly gain against the Japanese yen. This rally could be extended if the most recent US jobs report validates early Federal Reserve rate hikes. The dollar rose to a five-year high versus the yen this week, hitting 116.35, but it has since fallen back. The dollar has gained approximately 0.7 percent against the yen this week, and roughly 2.7 percent in the last five weeks, on anticipation that the Federal Reserve will begin raising interest rates several times in 2022, beginning in March, causing a bond market selloff and an increase in yields.

Furthermore, the upbeat market sentiment, backed by multiple factors, negatively impacts the safe-haven US dollar. On the other hand, the losses could be short-lived as investors await the release of the US jobs report later today, particularly the non-farm payrolls figure. On the other hand, if the number is firm, the Fed will have more ammunition to maintain its hawkish attitude, which will increase the chances of a hike in March.

Moving ahead, Fed Chair Powell’s testimony, US CPI m/m, Core Retail Sales m/m and UK Gross Domestic Product are all expected to offer enough news to keep the markets moving in the next week. Global geopolitical tensions and coronavirus (COVID-19) headlines will also be closely tracked, as they may influence risk levels in the market.

The Top Economic Events to Watch This Week

1. European M. Union Unemployment Rate – Monday – 10:00 GMT

The Eurostat Unemployment Rate is calculated by dividing the number of jobless employees by the total civilian labor force. It is a significant economic indicator for Europe. If the rate increases, it suggests that the European long-distance market is not expanding. A surge causes the European economy to deteriorate. In general, a decrease in the figure is considered beneficial (or “bullish”) for the EUR, whereas a rise is considered bad (or “bearish”).

Previous Release:

ACTUAL: 7.3 %

DEV: 0.00

CONS: 7.3 %

Last Released:

Thursday, December 2, 2021, 10:00 a.m.

2. Top Economic Events: Fed Chair Powell Testifies – Tuesday – 15:00 GMT 

This event will feature a speech by Federal Reserve Chair Jerome Powell. The testimony is normally divided into two parts: first, he reads a prepared statement (a text version is posted on the Fed’s website at the outset), and then the committee holds a question and answer session.

Because the questions aren’t known ahead of time, they can cause some unplanned situations, resulting in significant market volatility. As chairman of the central bank, he has greater power over the value of the nation’s currency than anybody else, which regulates short-term interest rates.

Traders pay close attention to his public appearances, since they frequently give away hints about future monetary policy. So, it is beneficial to the currency if the central bank is more hawkish than predicted.

3. US Consumer Price Index (MoM) – Wednesday, 13:30 GMT

On Wednesday, January 12, at 13:30 GMT, the US Consumer Price Index (MoM) will be released. The US Bureau of Labor Statistics’ Consumer Price Index measures price changes, based on a comparison of retail prices for a sample shopping basket of goods and services. Inflation has driven down the purchasing power of the US dollar.

The Consumer Price Index (CPI) is a significant indicator of inflation and changes in purchasing patterns. In general, a high reading for the USD is considered favorable (or bullish), while a low number is considered negative (or bearish). The next Consumer Price Index figures (MoM) for the United States are expected to come in at 0.4% with the latest figure being 0.53917.

Previous Release:

ACTUAL: 0.8 %

DEV: 0.54

CONS: 0.7 %

Last Released:

Friday, December 10, 2021, at 13:30 p.m.

ii. US Consumer Price Index ex Food & Energy (MoM):

On Wednesday, January 12, at 13:30 GMT, the US Consumer Price Index excluding food and energy (MoM) will be released. The US Department of Labor Statistics’ Consumer Price Index (CPI) Ex Food & Energy measures price changes based on a comparison of the retail prices of a sample shopping basket of goods and services. Volatility products such as food and energy are excluded from capturing an exact calculation. In general, a high rating for the USD is considered favorable (or bullish), while a low reading is considered negative (or bearish). The next US Consumer Price Index, ex Food & Energy (MoM), is expected to be 0.5, with the latest variation non-existent.

Previous Release:

ACTUAL: 0.5 %

DEV: 0.00

CONS: 0.5 %

Last Released:

Friday, December 10, 2021, at 13:30 p.m.

Top Economic Events

4. Top Economic Events: US Producer Price Index (MoM) – Thursday – 13:30 GMT

On Thursday, January 13, at 13:30 GMT, the US Producer Price Index (MoM) will be released. The Producer Price Index, published by the Bureau of Labor Statistics of the United States Department of Labor, examines the average changes in prices in US primary markets by commodity producers in all processing stages.

PPI changes are frequently regarded as a leading predictor of commodity inflation. In general, a high reading for the USD is considered favorable (or bullish), while a low number is deemed negative (or bearish). The next US Producer Price Index (MoM) consensus is unknown, but the last divergence was 1.54711.

Previous Release:

ACTUAL: 0.8 %

DEV: 1.55

CONS: 0.5 %

Last Released:

Tuesday, December 14, 2021, 13:30 p.m

5. US Retail Sales (MoM) – Friday – 13:30 GMT

On Friday, January 14, at 13:30 GMT, the United States’ retail sales (MoM) will occur. The total receipts of retail stores are measured in the US Census Bureau’s retail sales report. It’s a leading indicator that provides crucial information on consumer spending, which greatly impacts the GDP. Although high sales figures are expected to strengthen the USD, external factors, such as weather conditions, can distort the data and create a false impression. The pace of change in such sales is reflected in monthly percent changes. Retail sales fluctuations are frequently regarded as a leading indicator of consumer spending. In general, a high rating for the USD is considered favorable (or bullish), while a low reading is considered negative (or bearish).

Previous release:

ACTUAL: 0.3 %

DEV: -0.63

CONS: 0.8 %

Last Released:

Wednesday, December 15, 2021, 13:30 p.m.

ii. US Retail Sales ex Autos (MoM);

The total receipts of retail stores are measured in the US Census Bureau’s retail sales report. The pace of change in such sales is reflected in monthly percentage changes. Retail sales fluctuations are frequently regarded as a leading indicator of consumer spending. In general, a high rating for the USD is considered favorable (or bullish), while a low reading is considered negative (or bearish).

Previous Release:

ACTUAL: 0.3 %

DEV: -0.74

CONS: 0.9 %

Last Released:

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