Global financial markets return to normal trading conditions this week after two long holiday trading weeks. The new year is set to kick off in earnest as full liquidity returns to markets, and investors prepare to make moves after budget resets.
The past couple of weeks have seen a break in major fundamental economic data releases. However, this week offers the potential for significant market moves and trends to reassert themselves, with a plethora of U.S. data and key inflation numbers from other jurisdictions.
Here is our usual day-by-day breakdown of the major risk events this week:
Normal market conditions are set to resume, along with some major macroeconomic data releases. There is nothing notable in the Asian time zone, but Euro traders will focus on German Preliminary CPI data during the London session. As usual, this will be released state by state, with the average data expected to show a 0.3% month-on-month increase. In the New York session, the U.S. Final Services PMI is the only significant release.
Once again, the Asian session is quiet, but the focus shifts to Switzerland at the European open, with CPI data due. The UK Construction PMI and Eurozone Flash CPI data will follow later in the session. The first tier-1 U.S. data of the year will come with the JOLTS Job Openings and ISM Services PMI, released simultaneously with the Canadian Ivey PMI during the New York open.
The first major Australian data of the year—CPI—will be released early in the Asian session. The London session remains light, but U.S. jobs data continues with the ADP Non-Farm Employment figures early in the day. Crude Oil inventory data will follow but may be overshadowed by the December FOMC Meeting Minutes, released late in the U.S. session.
Attention in Asia will remain on Australia, with Retail Sales data due, followed by key Chinese CPI and PPI numbers. Europe has no significant releases, and the U.S. session looks relatively quiet, featuring only the weekly unemployment claims data.
The first proper trading Friday of the year is expected to be a classic ‘NFP’ trading day. With little on the calendar during the Asian and European sessions, traders will likely wait for the key U.S. employment data early in the New York session, which is expected to trigger volatility. Canadian employment data will also be released simultaneously, creating additional challenges for loonie traders, but U.S. data will likely dominate market moves. Preliminary University of Michigan Consumer Sentiment and Inflation Expectations figures are also scheduled but will take a back seat to employment data.
