What mattered last week:
- The S&P500 rose 1.90% last week, supported by President Bidens stimulus plans and good earnings news.
- Despite continued near term uncertainties around the virus and its mutations and tardy vaccine rollouts.
- As well as concerns over the long-term sustainability of ballooning government deficits.
- Volatility, as measured by the VIX index fell 2.4 points to close at 21.9.
- U.S. 10-year yields edged higher to 1.10%.
- Gold recovered from an early fall to finish 1.50% higher near $1855.00
- Crude oil closed flattish near $52.27/bbl.
- The ASX200 rallied 1.27% to close at 6800.4.
- The AUDUSD rose modestly to close near .7715 in a quiet week of trading.
For the week ahead, the key events are:
Australia: NAB business confidence and Q4 CPI (Wednesday).
- Q4 CPI (Wednesday): After extraordinary volatility in the prior two quarters coming from the temporary effect of child care subsidies and large swings in fuel prices, a more subdued inflation print is likely this week. Headline inflation is expected to rise by 0.7% q/q, while underlying inflation is expected to remain low at 0.4% q/q.
New Zealand: Balance of trade (Thursday), ANZ Roy Morgan Consumer confidence (Friday).
China: NBS manufacturing and non-manufacturing PMI (Saturday).
Japan: BoJ meeting minutes (Tuesday), retail sales (Thursday), employment, industrial production, and consumer confidence (Friday).
- Employment: Jobs data for December is expected to soften and push the unemployment rate higher, from 2.9% to 3.1%.
Singapore: CPI (Monday), industrial production (Tuesday), employment (Thursday).
Korea: Q4 GDP (Tuesday), retail sales (Friday).
U.S: S&P Case Shiller Home price, consumer confidence (Tuesday), durable goods (Wednesday), FOMC interest rate meeting and Q4 GDP, new home sales (Thursday), personal income and spending, and employment costs (Friday).
- FOMC meeting: The Fed is expected to leave monetary policy unchanged and remain dovish.
US earnings season continues with reports from companies including Apple, Microsoft, Tesla, and Facebook.
Euro Area: German IFO business survey (Monday), German consumer confidence (Wednesday), EA consumer confidence (Thursday), German inflation, and GDP (Friday).
UK: Employment (Tuesday).
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