Week Ahead – Retail Sales, Speeches, and CPI’s

Week Ahead – Retail Sales, Speeches, and CPI’s

I hope everyone had a great Christmas and a Happy New Year, ready to kick off the trading year! Before we dive into what’s ahead, here’s a quick recap of what you may have missed over the break:

• Vaccine rollouts have begun in the U.S. and the U.K.
• OPEC+ implemented a surprise production cut, boosting oil prices to $56.
• Tesla stock continues its meteoric rise, up 631% from the start of 2020, making Elon Musk the world’s wealthiest person with an estimated net worth of $250 billion.
• Bitcoin touched the $40,000 mark.
• A violent attack on the U.S. Capitol by Pro-Trump protesters disrupted the ratification of electoral votes, resulting in four deaths.
• GBP/USD reached 1.37.

Many view the Capitol attack as a direct assault on democracy, but let’s look forward to better times this year. Here’s what to watch for in the week ahead:

Monday, 11th January – Australia’s Retail Sales

Australia has largely managed to recover from the second wave of COVID-19, though a recent outbreak in Sydney’s northern beaches put the region under a two-week lockdown. As citizens await news on the lockdown’s end, analysts predict a rise in retail sales, boosted by an increase in savings during one of the longest lockdowns globally. Retail stores are seeing stronger trade as consumer confidence recovers.

Monday, 11th January – Bank of England Governor Bailey Speech

The UK’s struggle with the coronavirus pandemic continues, and deaths are overwhelming the NHS. Prime Minister Boris Johnson is relying on vaccine rollouts to curb transmission. Governor Andrew Bailey is expected to discuss the impact of COVID-19 on monetary policy and the broader economy.

Wednesday, 13th January and Friday, 15th January – United States CPI and Retail Sales MoM

The “reflation” trade is a hot topic, with many analysts expecting a strong recovery in the U.S. economy. However, the pandemic continues to hit hard, with daily cases touching 300,000 and deaths at 373,000. Analysts forecast CPI year-over-year to remain steady at 1.6%, with CPI month-over-month likely dropping slightly to 0.1%. Retail sales are expected to show improvement, moving from -1.1% to -0.2%.

Thursday, 14th January – Federal Reserve’s Jerome Powell Speech

Federal Reserve Chairman Jerome Powell’s speeches are always closely watched, and his recent remarks about inflation, stating that “there are significant disinflationary pressures around the world,” have analysts on edge. His words could move markets this week as investors look for clues on the Fed’s next moves.