Weekly Analysis (08-12 Jan)

After a week dominated by the Labor PMI and culminating with the NFP labor market report from the US, the new week will shift focus towards CPI data from various countries.
In the US, the most anticipated releases will be the CPI (Consumer Price Index) and PPI (Producer Price Index) data, which are expected to provide a clearer picture of the country's economic health. These releases come at a time when markets are increasingly skeptical about the next move by the Federal Reserve, especially after Friday's NFP data that exceeded expectations. Additionally, comments from US Federal Reserve officials will be closely monitored after recent hawkish statements from several members have been noted.
Europe's attention will mainly be focused on the representatives of the European Central Bank (ECB), who will give various speeches. Markets will be watching these announcements closely to gauge the ECB's stance on the next steps in monetary policy, especially given the deteriorating economic conditions in the region and concerns over the impact of higher interest rates on the economy. Germany will provide leading indicators with its Factory Orders and Industrial Production data, which will help assess the health of an economy that is on the brink of recession and whose outlook is increasingly deteriorating.
In the UK, market participants are mainly waiting for Friday's GDP data, which will update the growth rate picture and shed light on whether the downward trend seen in the last quarter will continue, pointing to an economic slowdown and increasing fears of recession. This comes against a backdrop of persistently high inflation levels and increasing interest rates, which are affecting economic activity and consumer spending. Additionally, the UK economic outlook will be shaped by comments from Bank of England (BoE) officials and data on retail sales, and manufacturing activity released throughout the week.
Australia is anticipating data on the housing market, including Building Permits, as well as retail sales figures, and, most importantly, Inflation data. Australia's economy continues to feel the effects of China's economic slowdown, as its trade balance heavily depends on the health of the Chinese market.
The Chinese economy will face its own set of challenges with the release of inflation data on Friday, alongside trade balance figures. A disinflation trend in China is worsening economic woes, while policymakers are attempting to promote growth with various support packages aimed at fostering an economic rebound.