Week Ahead: US and UK Economic Data in Focus

　　

Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.

What happened in the market last week?

• United States: Inflation Continues to Drop
  • Inflation is still going down, even though there was a temporary increase due to higher energy prices.
  • In December, the core CPI went up by 3.9% compared to the previous year, and it’s the first time in two and a half years that the yearly change is below 4%.
  • Another sign that inflation is easing is a less-than-expected increase in the Producer Price Index (PPI) in December.
• Interest Rate Watch: Looking at Rates from the Top
  • After interest rates went up a lot in the past two years, people in the financial markets are feeling positive and looking forward to rates coming down.
  • The idea of a smooth transition is partly because we expect the policies to be less restrictive.

Source: VT Markets MT4

Market pair movements in the last week

(All data taken from MT4)

The Dollar Index experienced a retreat in its weekly gains as U.S. producer prices unexpectedly fell in December, raising speculation about an imminent U.S. rate cut. Despite the decline, the index saw a daily increase, driven by safety buying amid U.S. and British military actions in Yemen. The Producer Price Index for final demand recorded a 0.1% dip last month, reinforcing expectations of lower inflation ahead and prompting traders to augment their bets on an upcoming rate cut. Fed funds futures now indicate a 79% likelihood of a March rate cut, up from 73% the previous day. Traders maintained this stance despite Thursday’s consumer price inflation data surpassing economists’ expectations and a robust December jobs report, which revealed mixed underlying details. Closing the week, the Dollar Index concluded with a 0.19% gain.

• USO/USD decreased by 1.34%.
• EUR/USD increased by 0.10%.
• XAU/USD increased by 0.18%.
• DJ30 increased by 0.25%.
• USD/JPY increased by 0.26%.
• GBP/USD increased by 0.32%.
• NAS100 increased significantly by 3.05%.

What to focus on this week?

Source: VT Markets Economic Calendar

In the fast-paced world of trading, staying vigilant and well-informed is paramount for success. The upcoming week is filled with crucial economic events that traders should closely monitor to navigate the markets effectively. From employment figures in the UK to price trends in Canada and inflation rates worldwide, each data point narrates a compelling story. The canvas of our economic puzzle extends to include US retail sales and Australian employment statistics, offering valuable insights that guide our understanding of the global financial terrain.

UK Claimant Count Change (16 January 2024)

Keep an eye on the UK Claimant Count Change, set to be released on January 16, 2024. After witnessing an increase from 8,900 to 16,000 in November, expectations are that the figure will rise further to 18,100 in the upcoming release.

Takeaway: UK’s Claimant Count Change reflects the current labor condition in the UK. This further increase forecast could potentially have a negative effect on the British Pound.

Canada Monthly Consumer Price Index (16 January 2024)

An additional event on January 16, Canada unveils its Monthly Consumer Price Index (CPI). In November 2023, consumer prices in Canada defied expectations by rising 0.1%, contrary to the anticipated 0.1% decline. However, the December 2023 data, expected to be released on January 16, 2024, forecasts a 0.3% decline in the monthly Consumer Price Index.

Takeaway: Canada’s CPI reflects the current inflation condition in Canada. This negative forecast could potentially have a negative effect on the Canadian Dollar.

UK Annual Consumer Price Index (17 January 2024)

On January 17, 2024, the focus turns to the UK Annual Consumer Price Index. After a slowdown to 3.9% in November 2023 from 4.6% in October, analysts anticipate a further decrease to 3.8% in the December 2023 data.

Takeaway: The UK annual CPI reflects the current inflation condition in the UK. This negative forecast could potentially have a negative effect on the British Pound.

US Retail Sales (17 January 2024)

Discover the trajectory of US retail sales on January 17. Following an unexpected 0.3% increase in November 2023, the upcoming release is projected to show a further uptick, with an expected growth of 0.4% in December 2023.

Takeaway: The US retail sales reflect the current economic condition in the US. This positive forecast could potentially have a positive effect on the US Dollar.

Australia Employment Change (18 January 2024)

Turn your attention to Australia on January 18, as the Employment Change data unfolds. After a notable increase of 61,500 in November 2023, the forecast for December 2023 suggests a more modest rise, with expectations set at 18,000.

Takeaway: Australia’s employment change reflects the current labor condition in Australia. This positive forecast could potentially have a positive effect on the Australian Dollar.

UK Retail Sales (19 January 2024)

As we approach January 19, anticipation builds for the release of UK Retail Sales data. Despite a robust 1.3% month-over-month growth in November 2023, December 2023 is expected to show a contraction of 0.5%.

Takeaway: The UK retail sales reflect the current economic condition in the US. This negative forecast could potentially have a negative effect on the British Pound.

US Prelim University of Michigan Consumer Sentiment (19 January 2024)

Closing out the week, all eyes will be on the US preliminary consumer sentiment from the University of Michigan for January 19. Projections indicate a slight dip to 69.6 from the previous month’s 69.7 in December 2023, offering insights into the mood of the American consumer.

Takeaway: The US Prelim University of Michigan consumer sentiment reflects the preliminary consumer mood regarding the economic condition in the US. This slight drop forecast could potentially have no effect on the US Dollar.

Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.