Events to Look Out for Next Week

Andria Pichidi

January 28, 2022

The BoE, ECB and RBA policy meetings and press conferences are the central bank highlights this week. As the FOMC this week has not only prepared the ground for a lift off in rates, but also flagged that a balance sheet reduction is coming into view, speculation has been for further action from the BoE next week. It seems that if the Fed is confident enough in the recovery to map out the way to a removal of policy accommodation, the BoE can also afford to focus on inflation risks and overlook remaining uncertainties. There is also some movement at the ECB it seems, and pressure to at least commit to an end date for net asset purchases is mounting as German data signals a quick recovery from Omicron. On top of all this, next week’s heavy dose of global data releases includes US NonFarm payrolls and employment data from Canada and NZ, and European CPI & GDP.

Monday – 31 January 2022

Chinese New Year’s Eve – Asia Markets closed
Manufacturing PMI (CNY, GMT 01:00) – The NBS Manufacturing PMI is expected to hold in the neutral level at 50.0 in January, confirming the Chinese slowdown once again.
Gross Domestic Product (EUR, GMT 10:00) – Eurozone economic confidence plunged to 114.2 in January, a much lower than expected number, that reflected in part a sharp downward revision to the November figure. After weaker PMI reports, and the decline in the preliminary consumer confidence reading, the lower numbers were no surprise and reflect an overall weak start to the year for the Eurozone. Hence, both confidence readings for January could reflect further pressure on the upcoming preliminary Q4 GDP figures, which are expected to be released at 0.3% q/q from 2.2% q/q.

Tuesday – 01 February 2022

Chinese New Year – Asia Markets closed
Interest Rate Decision and Statement (AUD, GMT 03:30) – No change is seen in the current 0.1% policy setting, alongside an announcement and MPR that are consistent with steady policy through year end. However, the Australia labour market remains strong, with employment picking up and the jobless rate falling, adding to the arguments of the hawkish camp at the RBA.
ISM Manufacturing PMI and Jolts (USD, GMT 15:00) – The ISM index is expected to ease to 58.5 from 58.8 (was 58.7) in December, compared to an 18-year high of 63.7 in March, an 11-year low of 41.6 in April 2020, and an all-time low of 30.3 in June 1980. The Jolts Job Openings are expected slightly higher in December at 11.075 mln from 10.562 mln.
Employment data (NZD, GMT 21:45) – The unemployment rate in Q4 is expected higher at 3.9% from 3.4%, while employment change is expected to show a significant deduction at 0.4% from 2%.

Wednesday – 02 February 2022

OPEC-JMMC meeting attended by representatives from the 13 OPEC members and 11 other oil-rich nations.
Consumer Price Index (EUR, GMT 10:00) – The prel. Euro Area CPI for January is anticipated to dip with the headline reaching 4.4% y/y from 5.0% y/y.
ADP Employment Change (USD, GMT 13:15) – The key private payrolls number is expected to grow by just 250k (a nearly 550k decline from last month’s 870k reading).

Thursday – 03 February 2022

Event of the Week – Interest Rate Decision, Statement and MPC Voting (GBP, GMT 12:00) – The BoE already lifted Bank Rate by 15 bp to 0.25% in December, and after the Fed announcement, markets are preparing for further action when the MPC once again sets policy. The fact that the BoE hasn’t pushed back against lingering speculation of another move has only added to pressure on bonds. Still, with labour market data pointing to ongoing tightening, cost pressures and staff shortages, unions have been given a very strong hand in wage talks this year. So more rate hikes clearly are on the way and while there may be arguments for the BoE to wait another month, it seems unlikely that officials wouldn’t have pushed back against mounting market speculation of a follow up move next week.
Event of the Week – Interest Rate Decision, Statement and Conference (EUR, GMT 12:45 & 13:30) –The ECB remains much more generous, but the most recent comments also suggest an ongoing shift. The December forecasts still saw inflation slightly below the 2% mark this year on average this year and next. So far the ECB’s main scenario has been that rates will remain on hold through this year with the guidance that net asset purchases would end shortly before the first rate hike. When they will end remains open so far, and while net asset purchases via the APP program are set to run at a higher pace through the second and third quarter, when PEPP has ended, there is no commitment to let net purchases run through the fourth quarter. In theory then the first step for the ECB would be to commit to an end date for net asset purchases under the APP program. That could happen next week, if the ECB is ready to accept that interest rates could rise earlier than previously anticipated in the light of rising inflation pressures.
Non-Manufacturing PMI (USD, GMT 15:00) – The ISM-NMI index is expected to hold steady from 62.0 in December, down from an all-time high of 69.1 in November, and a prior all-time high of 66.7 in October.

Friday – 04 February 2022

Event of the Week – Non-Farm Payrolls (USD, GMT 13:30) – A 250k January nonfarm payroll increase is anticipated, after gains of 199k in December. A payroll restraint is expected from the Omicron wave, alongside a boost to the workweek and hourly earnings. A 45k factory jobs rise in January is forecasted, after a 26k December increase, with the jobless rate to sustain the December drop to 3.9% from 4.2%, and hours-worked are assumed to rise 0.3% after the 0.2% December increase. Average hourly earnings are assumed to rise 0.5%, after gains of 0.6% in December and 0.4% in November, while the y/y wage gain should rise to 5.2% from 4.7% due to a hard comparison.
Employment data (CAD, GMT 13:30) – Canada’s employment rose 54.7k in December following the 153.7k rise in November. The jobless rate dipped to 5.9% from 6.0%.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.