Recession fears are making a comeback and concern over the growth outlook are boosting haven flows and weighing on equities. The coming week features several PMI and GDP reports and sticky inflation out of Australia and New Zealand, while the BoC rate decision and policy statement will be in the spotlight. Note that markets in China, South Korea, and Taiwan will be closed for Lunar New Year holidays, with the former closed through the whole week.
Have a look at the most important events of the coming days in our usual weekly publication.
Monday – 23 January 2023
Chinese New Year
ECB President Lagarde Speech (EUR, GMT 17:45)
Tuesday – 24 January 2023
Markit PMIs (EUR, GMT 08:30) – The January Composite PMIs for Europe is expected to rise slightly to 49.8 from 49.3 amid improvement in both Services and Manufacturing, with Services at 50.2.
Markit PMIs (USD, GMT 14:45) – The prelim. November Services PMIs for the UK is expected unchanged at 48.8.
Consumer Price Inflation (NZD, GMT 21:45) – New Zealand inflation for Q4 as measured by CPI is expected to be finalised at 7.1% y/y from 7.2% and 2.4% q/q from 2.2% q/q.
Wednesday – 25 January 2023
Consumer Price Inflation (AUD, GMT 00:30) – Australia CPI inflation lifted to 7.3% y/y in November, from 6.9% in the previous month and matching the record high from September. Hence the final Q4 headline reading is expected to lift as well to 7.5% y/y, while the final quarter could ease to 1.6% q/q from 1.8% q/q.
BOC Cash Rate & Rate Statement (CAD, GMT 15:00) – The Canada CPI posted a -0.6% decline in December after edging up 0.1% in November. That is much weaker than expected and is the lowest since the -0.7% from April 2020. Though inflation rates remain very elevated, the deceleration in prices, and the weakness in the housing sector, could see the BoC temper the pace of rate hikes at the upcoming policy meeting on January 25.
Thursday – 26 January 2023
Gross Domestic Product (USD, GMT 13:30) – The Q4 GDP grow should show a grow to 2.5% with a 2.6% clip for real final sales and a tiny $2 bln inventory addition that leaves a restrained $40 bln inventory accumulation rate. The Q4 sales climb should be led by a solid 3.4% pace for consumption, alongside an estimated 5.5% growth pace for nonresidential investment led by a 7.0% pace for intellectual property investment and a welcome 5.0% bounce in nonresidential structures. The housing sector should continue to weigh on the economy, with an estimated -12.0% Q4 contraction rate for residential investment. The solid close for GDP growth into the end of 2022 bodes well for a soft-landing path in 2023, though we expect a -0.4% contraction rate for GDP in Q1, and the risks for growth in 2023 lie to the downside.
Durable goods (USD, GMT 13:30) – Durable goods orders are expected to rise 2.9% in December with an 8.0% transportation orders surge, after a 0.2% headline rise in November that included a -6.3% transportation orders drop. Durable orders ex-transportation are pegged to rise 0.3%, after a 0.1% November uptick. Defense orders are expected to fall -2.4%, following a 6.3% November rise.
Friday – 27 January 2023
Personal Income/Consumption (USD, GMT 13:30) – Personal income is expected to rise at 0.2% in December after a 0.4% November gain. We expect a 0.2% rise in compensation after a 0.5% gain, given a -0.1% December decrease for hours-worked but a 0.3% rise for hourly earnings.
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