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What mattered last week and a preview of the week ahead

What mattered last week:

  • U.S. equities rallied on continued investor optimism after the U.S. and China signed off on “phase one” of a trade deal.
  • Also aided by a positive start to the December quarter earnings season with strong reports from some of the key banks.
  • Supported also by a potential upswing in China data. While December quarter GDP data came in as expected at 6% y/y, retail sales, fixed-asset investment and industrial production all beat expectations.
  • A less eventful week for crude oil futures closing the week below $59.00.
  • Likewise for gold and silver, closing near $1560 and $18.00 respectively.
  • The ASX200 made fresh all-time highs, closing the week above 7050 taking its gains for the year to 5.69%.
  • Not such good news for the AUDUSD as it closed below .6900c as the U.S. dollar flexed its muscles.

For the week ahead, the key events are:

Australia:  Westpac consumer confidence and labour force (Thursday).

  • Westpac consumer confidence (Friday): Will be watched for signs of improvement in consumer sentiment after weakness during the second half of 2019.
  • Labour force survey (Thursday): After a +39.9k rise in November the market is looking for a softer +16k gain in December and for the unemployment rate to remain unchanged at 5.2%.

New Zealand: Global dairy trade auction (Tuesday), Q4 CPI (Friday).

  • Q4 CPI (Friday): The market is looking for headline CPI to rise by 0.4% q/q in the December quarter, with the annual rate of inflation accelerating to 1.8% from 1.5% in Q3.

China: Loan prime rate (Monday).

Japan: BoJ interest rate meeting (Tuesday), balance of trade (Thursday), CPI (Friday).

U.S.: House price index, existing-home sales (Wednesday), Markit PMI’s (Friday)

  • Markit PMIs (Friday): The Markit PMI’s survey is expected to see further consolation around 52.5 in January to set the platform for a recovery in 2020.

December quarter earnings season continues with reports from companies including Neflix, IBM and American Express.

Canada: CPI and BoC interest rate meeting (Wednesday), retail sales (Friday).

  • BoC Meeting (Wednesday): The BoC is expected to keep interest rates on hold at 1.75 and remain patient in responding to incoming data, ahead of a possible rate cut in Q2.

Euro Area: German PPI (Monday), EA and German ZEW economic survey (Tuesday), ECB interest rate meeting (Thursday), EA and German Markit PMI’s.

  • ECB meeting (Thursday): After launching a comprehensive quantitative easing program last September no change to policy is expected at this week’s meeting.

UK:Labour market report (Tuesday), Markit/CIPS PMI’s (Friday).

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