Events to Look Out for Next Week

• German IFO (EUR, GMT 09:00) – German IFO business confidence is expected to slip slightly to 90.0 in January after the jump seen in December to 92.1.
• BoJ Monetary Policy Meeting Minutes (JPY, GMT 23:50) – The BoJ minutes should provide further guidance for 2021.

Tuesday – 26 January 2021

• Average Earnings Index & ILO rate (GBP, GMT 07:00) – UK Earnings with the bonus-included figure are expected to slow down to 2.3% y/y in the three months to November. UK ILO unemployment is expected higher at 5.1% in the three months to November.
• Consumer Confidence (USD, GMT 15:00) – The US Consumer confidence is expected to slip to 88.0 from 88.6 in December, versus a 6-year low of 85.7 in April. The confidence measures have shown divergent swings since mid-2020 that have a downward tilt into January, likely due to the surge in virus cases, more stringent lockdowns, and the bizarre political events of recent weeks. We should be seeing some lift from stimulus passage and vaccine distributions, however, which may be more evident in February.

Wednesday – 27 January 2021

• Consumer Price Index (AUD, GMT 00:30) – Australian inflation data in Q4 is expected to decline at 1.5% q/q while headline remains in line with Q3 at 0.7% y/y.
• Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to rise 3.0% in December with an 8.3% climb in transportation orders. A defense orders gain is pegged at 3.0%, following a 3.7% November bounce. Boeing orders jumped to 90 in December with the lifting of the 737 MAX grounding, from 27 in November and zero in the two months before that. Durable shipments should rise 1.0%, and inventories should rise 0.5%.
• Interest Rate Decision and Conference (USD, GMT 19:00) – The FOMC is due to meet (Tuesday, Wednesday) but no changes are expected. The FOMC didn’t make any big changes in its policy stance at the December 16 meeting. However, it did tweak its statement to emphasize its uber-accommodative posture, which was underscored several times by Chair Powell in his press conference. The forecasts indicate that current rates will remain in place through 2023.

Thursday – 28 January 2021

• Harmonized Index of Consumer Prices (EUR, GMT 13:00) – The German prel. HICP inflation for January is anticipated to be released at -0.6% y/y from -0.7% y/y. Germany’s temporary VAT cut is partly to blame as are base effects from oil prices, but it is also clear that a lack of demand and the closure of the hospitality sector continue to keep a lid on headline inflation numbers.
• Gross Domestic Product (USD, GMT 12:30) – The prelim. Gross Domestic Product should advance at 4.1% in Q4 and 3.2% in Q1, after 33.4% growth in Q3. We expect a Q4 moderation in consumption growth to 2.2% from 41.0% in Q3 as heightened coronavirus restrictions impacted spending, while government purchases contract at an estimated -5% rate, and nonresidential investment in structures fall at a -9% pace. We saw in Q3 a continued boom in housing activity and equipment spending.
  

Friday – 29 January 2021

• Gross Domestic Product  (EUR, GMT 09:00) – Eurozone’s GDP contracted -5.0% last year, according to the first estimate for economic activity last year. That compared to a modest rise of 0.6% in 2019 and while it was somewhat better than median expectations, the numbers refer to unadjusted data. Adjusted for calendar effects, GDP was actually down -5.3%. There is no data for the last quarter yet, but it is pretty clear that after the recession in the first quarter and the rebound over the summer, virus developments weighed on growth again in the last quarter of 2020, although less than feared at one point. 
• Personal Income/Consumption (USD, GMT 12:30) – A 0.1% increase in headline rise for personal income in December is anticipated after a -1.1% drop in November, alongside a -0.7% drop in consumption after a -0.4% November decline.