Monday, January 31 As a rule, the economic calendar is completely empty on Mondays, but this time we are waiting for some rather significant data. Firstly, it is retail sales and industrial production in Japan. Sales in December increased by 1.4% year-on-year, which turned out to be much less than the projected 2.7%. Thus, Japan showed a slowdown in retail sales growth – in November the indicator was 1.9%. Industrial production in Japan in December decreased by 1% in monthly terms, but increased by 2.7% compared to December 2020. Also on Monday, you should pay attention to the preliminary data on eurozone GDP. The pace of economic growth, according to the first estimate, accelerated by 4.6% in annual terms in the fourth quarter of 2021 and by 0.3% in quarterly terms. Analysts expected the eurozone GDP to grow by 4.7% y/y. In comparison with the United States, where record economic growth rates have been captured over the past few years, the slowdown in the European economy looks very weak. So the euro may come under pressure at the beginning of the week. The day will end with the producer price index in Canada, which should decrease from 18.1% to 18.0%. However, most likely the market will ignore these minor changes. Tuesday, February 1 The main event on Tuesday will be a meeting of the Board of the Reserve Bank of Australia. The refinancing rate is expected to remain unchanged. At the same time, special attention should be paid to the comments of the regulator regarding plans to tighten the parameters of monetary policy. Also on Tuesday, business activity indices in the manufacturing sectors of the eurozone, Germany, Great Britain, Canada and the USA will be presented. In addition, the United States will publish statistics on the number of open vacancies in the JOLTS labor market. Wednesday, February 2 Wednesday will begin with the publication of data on the labor market in New Zealand. Analysts predict that the unemployment rate will remain unchanged. So the New Zealand dollar will not react to these statistics in any way. The main event of the day will be the publication of data on inflation in Europe, where it may accelerate from 5.0% to 5.1%. Given the uncertain position of the European Central Bank, further inflation growth looks like an exceptionally negative factor, which will contribute to further weakening of the single European currency. However, already during the American trading session, market sentiment may change diametrically. The fact is that employment in the United States can grow by only 250 thousand, (in the previous month it increased by 807 thousand). The market will definitely perceive this as a negative factor, and the dollar will begin to actively lose its positions. Thursday, February 3 Thursday will be the busiest day of the week due to the meetings of the boards of the Bank of England and the European Central Bank. As expected, the British regulator will once again raise the refinancing rate – this time from 0.25% to 0.50%. Such a rapid pace of monetary policy tightening will contribute to the growth of the pound sterling. But the ECB will probably leave everything unchanged. And the subsequent comments and statements will be much more important. And if the European regulator continues to adhere to an ultra-soft approach to monetary policy, then the single European currency, of course, will continue to confidently lose its position. Friday, February 4 The week will end with the publication of a report by the United States Department of Labor, but before that, data on retail sales in the eurozone will be published. They are also likely to put pressure on the euro, as their growth rate may slow from 7.8% to 5.5%, which indicates a clear slowdown in the pace of economic recovery. But the content of the report of the US Department of Labor will almost certainly contribute to the growth of the dollar. And although the unemployment rate should remain unchanged, 210 thousand new jobs can be created outside of agriculture. Such indicators suggest that the American labor market is still stable and the potential for further reduction in the unemployment rate remains.
