Week’s main events (January 06 – January 10)

This will be a busy week with US employment data, Federal Reserve minutes, and inflation data from Australia, the Eurozone, Switzerland, Sweden, Mexico, and China. The US economy is expected to add 157k, down significantly from 227k last month. Inflation in Europe, Australia, and Switzerland is expected to rise slightly, which may undermine central banks’ plans to cut rates further. On Wednesday, the Fed will release the minutes of its December meeting, which decided on a third consecutive 25 basis point rate cut, where a divergent view is expected. The minutes also help clarify the outlook for interest rates after the Fed spooked markets last month by switching to a more cautious outlook. Oil and natural gas will also remain the focus this week. Oil inventories have been declining for the last 6 weeks, while natural gas prices rose sharply last week as Ukraine stopped gas transit to Europe from Russia on January 1.

Monday, January 06

On Monday, investors will closely monitor data on business activity in the services sector across key economies. A value above 50.0 indicates industry expansion, while a value below indicates contraction. Therefore, the growth of the indicator is a positive factor for the national currency, while the decrease of this indicator negatively affects the exchange rate.

Main events of the day:

– Australia Services PMI (m/m) at 00:00 (GMT+2);
– Japan Services PMI (m/m) at 02:30 (GMT+2);
– China Caixin Services PMI (m/m) at 03:45 (GMT+2);
– Switzerland Retail Sales (m/m) at 08:30 (GMT+2);
– German Services PMI (m/m) at 10:55 (GMT+2);
– Eurozone Services PMI (m/m) at 11:00 (GMT+2);
– UK Services PMI (m/m) at 11:30 (GMT+2);
– German Consumer Price Index (m/m) at 15:00 (GMT+2);
– US Services PMI (m/m) at 16:45 (GMT+2);
– US Factory Orders (m/m) at 17:00 (GMT+2).

Tuesday, January 07

On Tuesday, traders will focus on Swiss and Eurozone inflation data. In Switzerland, the consumer price level is expected to rise from 0.7% to 1.0% y/y, while in the Eurozone, inflation is expected to rise from 2.2% to 2.4% y/y. A rise in the national currency usually accompanies growth above the forecasted values, forcing the central bank to postpone a rate cut. In the US session, traders should pay attention to US open jobs and trade balance data. The trade surplus growth is a positive factor for GDP growth and, therefore, a growth factor for the currency. However, if the labor market data shows a decline in job openings more than expected, it could have a much stronger negative effect on the USD.

Main events of the day:

– Switzerland Consumer Price Index (m/m) at 09:30 (GMT+2);
– Eurozone Consumer Price Index (m/m) at 12:00 (GMT+2);
– Eurozone Unemployment Rate (m/m) at 12:00 (GMT+2);
– US Trade Balance (m/m) at 15:30 (GMT+2);
– Canada Trade Balance (m/m) at 15:30 (GMT+2);
– Canada Ivey PMI (m/m) at 15:30 (GMT+2);
– US ISM Services PMI (m/m) at 17:00 (GMT+2);
– US JOLTs Job Openings (m/m) at 17:00 (GMT+2).

Wednesday, January 08

On Wednesday, the most important release for investors will be the Consumer Price Index in Australia. Analysts expect inflation to rise slightly from 2.1% to 2.2% y/y. Volatility on currency pairs with the Australian dollar will increase. At the US session, traders are expected to watch the December FOMC meeting minutes, where there was a 0.25% rate cut. The minutes may explain the Fed’s further plans for the next meeting. If not, we should expect only a short-term spike in volatility on US indices and instruments with the US dollar. Also, traders should not miss the US Crude Oil Inventories data, which significantly impacts oil prices. Oil inventories have been declining for the last 6 weeks, which has supported prices.

Main events of the day:

– Australia Consumer Price Index (m/m) at 02:30 (GMT+2);
– German Retail Sales (m/m) at 09:00 (GMT+2);
– Sweden Inflation Rate (m/m) at 09:00 (GMT+2);
– Eurozone Producer Price Index (m/m) at 12:00 (GMT+2);
– US ADP Non-Farm Employment Change (m/m) at 15:15 (GMT+2);
– US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
– US Crude Oil Reserves (w/w) at 17:30 (GMT+2);
– US FOMC Meeting Minutes at 21:00 (GMT+2).

Thursday, January 09

A wide variety of news is expected on Thursday. The main ones will be the inflation data from China, which has a strong influence on Asian indices, as well as on the Australian and New Zealand dollar. Mexico will also release consumer price data. A slight decline in inflation is expected, and it may put additional pressure on the Mexican peso, which is already under pressure from the dovish policy of the Bank of Mexico.

Main events of the day:

– Australia Retail Sales (m/m) at 02:30 (GMT+2);
– Australia Trade Balance (m/m) at 02:30 (GMT+2);
– China Consumer Price Index (m/m) at 03:30 (GMT+2);
– China Producer Price Index (m/m) at 03:30 (GMT+2);
– German Trade Balance (m/m) at 09:00 (GMT+2);
– Eurozone Trade Balance (m/m) at 12:00 (GMT+2);
– Eurozone Retail Sales (m/m) at 12:00 (GMT+2);
– Mexican Inflation Rate (m/m) at 14:00 (GMT+2);
– US Natural Gas Storage (w/w) at 17:30 (GMT+2).

Friday, January 10

On Friday, all traders will focus on the monthly US Non-Farm Payrolls labor market report. It is expected to show that the US economy added 154,000 jobs in December and that the unemployment rate remained at 4.2%. Compared to last month’s figure of 227k, such data would indicate more of a cooling labor market, which would be negative for the US dollar. Also, on Friday, labor market data for Switzerland and Canada are due, but no change is expected there.

Main events of the day:

– Switzerland Unemployment Rate (m/m) at 08:45 (GMT+2);
– US Non-Farm Payrolls (m/m) at 15:30 (GMT+2);
– US Average Hourly Earnings (m/m) at 15:30 (GMT+2);
– US Unemployment Rate (m/m) at 15:30 (GMT+2);
– Canada Unemployment Rate (m/m) at 15:30 (GMT+2);
– US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2).

by JustMarkets, 2025.01.06

Open Account