A review of the week past and the week ahead

Charts (3)

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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