Currency

The Week Ahead – The UK Economy, Central Bank Chatter, and U.S Stimulus in Focus

On the Macro

It’s a quieter week ahead on the economic calendar, with 35 stats in focus in the week ending 12th February. In the week prior, 70 stats had been in focus.

For the Dollar:

It’s a quiet week ahead.

Key stats include December’s JOLT’s job openings and January inflation figures on Tuesday and Wednesday.

Expect any pickup in inflationary pressures to support the Greenback and weigh on riskier assets.

The focus will shift to the weekly jobless claims on Thursday, ahead of consumer sentiment figures on Friday.

On the monetary policy front, FED Chair Powell is scheduled to speak late on Wednesday. Expect any chatter on the economic outlook and monetary policy to influence. At the last FOMC press conference, the FED Chair had failed to assure the markets on bond purchases.

The Dollar Spot Index ended the week up by 0.51% to 91.042.

For the EUR:

It’s also a quieter week ahead on the economic data front, with the German economy in the spotlight.

German industrial production and trade figures for December are due out on Monday and Tuesday.

Expect both data sets to influence both the EUR and the European majors.

On Friday, industrial production figures for the Eurozone will also provide direction.

Ahead of the Eurozone figures, Italian and French industrial production figures will also draw interest on Tuesday and Wednesday.

Finalized January inflation figures for Germany and Spain should have a muted impact on the markets, however.

On the monetary policy front, ECB President Lagarde is scheduled to speak late on Monday and again on Wednesday.

The EUR ended the week down by 0.74% to $1.2046.

For the Pound:

It’s a busy week ahead on the economic calendar.

In the 1st half of the week, January retail sales figures will draw attention in the early hours of Tuesday. The BRC Retail Sales Monitor will likely reflect the effects of lockdown measures introduced in late December.

The focus will then shift to 4th quarter GDP figures and December industrial and manufacturing production figures due out on Friday.

On the monetary policy front, BoE Gov. Bailey is scheduled to speak late on Wednesday. Any further talk of negative rates could peg back the Pound.

The Pound ended the week up by 0.20% to $1.3735.

For the Loonie:

It’s a particularly quiet week ahead on the economic calendar.

There are no material stats due out of Canada to provide the Loonie with direction.

A lack of stats will leave the Loonie in the hands of COVID-19 news and crude oil prices.

The IEA’s monthly report is due out in the week ahead. Expect the EIA and API inventory numbers to also influence.

The Loonie ended the week up by 0.16% to C$1.2756 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively quiet week.

January business confidence and February consumer sentiment figures are due out on Tuesday and Wednesday.

Business investment and consumer spending remain key to a sustainable economic recovery.

With little else for the markets to consider, expect plenty of influence from the numbers.

The Aussie Dollar ended the week up by 0.44% to $0.7678.

For the Kiwi Dollar:

It’s a busy week ahead on the economic calendar.

In the 1st half of the week, inflation expectation figures will draw interest.

Through the 2nd half of the week, the focus will then shift to electronic card retail sales and Business PMI figures for January.

Retail sales figures are due out on Thursday, with PMI numbers due out on Friday. We would expect greater Kiwi Dollar sensitivity to any disappointing sales figures.

The Kiwi Dollar ended the week up by 0.07% to $0.7198.

For the Japanese Yen:

It is a particularly quiet week ahead.

There are no material stats due out of Japan, leaving the Yen in the hands of market risk sentiment.

COVID-19 and U.S politics remain key drivers near-term.

The Japanese Yen ended the week down by 0.68% to ¥105.39 against the U.S Dollar.

Out of China

It’s a quieter week ahead, with stats limited to January inflation figures due out on Wednesday.

With little else to consider in a shortened week, any rise in U.S – China tensions would also need monitoring.

The Chinese Yuan ended the week down by 0.58% to CNY6.4658 against the U.S Dollar.

Geo-Politics

U.S Politics

Stimulus talk and foreign policy moves by U.S President Joe Biden remain key in the week.

The markets will need delivery of the $1.9tn relief package to support riskier assets after some gloomy labor market numbers.

COVID-19

Vaccination rates and availability of vaccines will continue to be key areas of interest.

An upward trend in vaccination rates and a downward trend on infection rates would support riskier assets in the week.

Corporate Earnings

A number of big names deliver results in the week ahead.

From the U.S, key names include but are not limited to:

Coca-Cola (Wed), General Motors Co. (Wed), and Walt Disney Co. (Thurs).