This week brings a series of crucial economic releases and corporate earnings reports that could influence global markets. Key data includes China’s Manufacturing PMI, the US Federal Funds Rate decision, and the Eurozone’s Main Refinancing Rate, offering insights into economic growth and inflation trends. In addition, major US corporations such as Meta, Apple, and Exxon Mobil are set to report earnings, shedding light on sector performance and market sentiment. Investors and policymakers will closely monitor these events to gauge economic direction and potential monetary policy adjustments.
High Impact Economic Events
Monday 03:30 am (GMT+2) – China: Manufacturing PMI (CNY)
Tuesday 17:00 (GMT+2) – USA: CB Consumer Confidence (USD)
Wednesday 02:30 am (GMT+2) – Australia: CPI q/q (AUD)
Wednesday 16:45 (GMT+2) – Canada: Overnight Rate (CAD)
Wednesday 21:00 (GMT+2) – USA: Federal Funds Rate (USD)
Thursday 15:15 (GMT+2) – Europe: Main Refinancing Rate (EUR)
Thursday 15:30 (GMT+2) – USA: Advance GDP q/q (USD)
Thursday 15:30 (GMT+2) – USA: Unemployment Claims (USD)
Friday All Day – Europe: German Prelim CPI m/m (EUR)
Friday 15:30 (GMT+2) – Canada: GDP m/m (CAD)
Friday 15:30 (GMT+2) – USA: Core PCE Price Index m/m (USD)
Monday, January 27
03:30 am – China: Manufacturing PMI (CNY)
China’s Manufacturing PMI Index is a key economic indicator derived from monthly surveys of enterprise purchasing managers, covering various aspects such as purchasing, production, and distribution. It serves as an important tool for tracking macroeconomic trends and forecasting economic conditions. The Composite PMI Output Index measures changes in overall industry output, including both manufacturing and non-manufacturing sectors. A PMI reading above 50% indicates economic expansion, while a reading below 50% signals contraction.
China’s manufacturing PMI remained in expansion at 50.1 in December, marking the third consecutive month of growth. New orders and export orders continued to rise, while the equipment manufacturing sector stayed in expansion for five months. The PMI averaged 50.2 in Q4, up from 49.4 in Q3, reflecting a more balanced supply-demand dynamic and a stable economic outlook.
Analysts expect a growth reading of 50.1.
Tuesday, January 28
17:00 – USA: CB Consumer Confidence (USD)
Consumer Confidence provides a comprehensive analysis of consumer sentiment regarding current and future economic conditions. Published monthly, it examines consumer attitudes, spending intentions, vacation plans, and expectations surrounding inflation, stock prices, and interest rates. The report is segmented by demographics such as age and income and includes insights by region and for the top eight US states. This data is valuable for businesses and policymakers to assess consumer behavior and predict economic trends.
US consumer confidence dropped in December, with the index falling 8.1 points to 104.7 amid growing concerns about future economic conditions. Inflation expectations held steady at 5.0%, while rising mortgage rates dampened home-buying plans. Consumers remained cautious about stock prices and interest rates, with politics and tariffs increasingly shaping their outlook.
Analysts anticipate that the upcoming release will indicate a reading of 105.7.
Wednesday, January 29
02:30 am – Australia: CPI q/q (AUD)
The monthly Consumer Price Index (CPI) indicator is a key measure of inflation, tracking changes in the prices of goods and services across various categories of household expenditures. This data provides insight into consumer price trends, helping assess the cost of living and inflationary pressures. The CPI is used by policymakers, including central banks, to guide decisions on monetary policy, such as interest rates, and by businesses to adjust pricing strategies and contracts linked to inflation.
Australia’s Consumer Price Index (CPI) rose 0.2% in the September 2024 quarter and 2.8% over the year. Key price increases were seen in recreation, food, and alcohol, while electricity and fuel prices declined due to government rebates and lower global demand. Rental price growth slowed, influenced by increased rent assistance, while food inflation remained steady at 3.3%, driven by higher fruit and vegetable prices.
Economists project a reading of 0.4%.
16:45 – Canada: Overnight Rate (CAD)
The Bank of Canada uses the target for the overnight rate, also known as the policy interest rate, to control inflation. This rate influences other interest rates in the economy, affecting loans, mortgages, and savings. The Bank adjusts this rate to either stimulate economic growth by lowering it (encouraging spending) or to curb inflation by raising it (encouraging savings). The target rate is part of the Bank’s broader strategy to maintain economic stability.
The Bank of Canada cut its policy rate by 50 basis points to 3.25% to support growth and maintain inflation near 2%. Economic growth slowed in Q3, while consumer spending and housing improved. Future rate decisions will depend on economic data and inflation trends.
Analysts anticipate a rate cut by 25 basis points.
21:00 – USA: Federal Funds Rate (USD)
The Federal Reserve adjusts monetary policy by changing its target range for the federal funds rate, which impacts overnight borrowing rates for banks. Lowering the target, or “easing,” reduces interest rates to stimulate the economy during slow growth, low inflation, or high unemployment. Raising the target, or “tightening,” increases rates to cool an overheating economy, high inflation, or low unemployment. These rate changes affect broader financial conditions, influencing household and business spending and ultimately impacting economic activity, employment, unemployment, and inflation.
In December, the Federal Reserve cut its interest rate by 0.25% to 4.25-4.50%, citing solid growth and easing labor markets, while inflation remains slightly high. Future changes will depend on economic conditions.
Economists anticipate that the rate will remain unchanged.
Thursday, January 30
15:15 – Europe: Main Refinancing Rate (EUR)
The ECB Interest Rate Decision is announced after the European Central Bank meetings, during which the Eurozone’s monetary policy is discussed. The interest rate decisions are made depending on the inflationary outlook and economic growth.
Cut in deposit rates may have a negative effect on EUR quotes.
The ECB cut interest rates by 25 basis points, lowering the deposit rate to 3.00% from December 18, 2024. Inflation is expected to reach 2% by 2026, while economic growth remains sluggish. Future rate decisions will depend on economic data.
Analysts anticipate a reduction of 10 basis points.
15:30 – USA: Unemployment Claims (USD)
An initial claim is filed by an unemployed individual seeking eligibility for unemployment insurance after leaving a job. This count serves as a leading economic indicator, reflecting labor market conditions.
In January, jobless claims rose to 223,000, with insured unemployment at 1.89 million, the highest since 2021. The insured unemployment rate stayed at 1.2%.
Economists expect unemployment claims to increase by 225,000.
Friday, January 31
All Day – Europe: German Prelim CPI m/m (EUR)
Germany’s consumer price index (CPI) tracks average price changes for goods and services across all household types and regions, covering essentials like rent, food, clothing, vehicles, and services such as hairdressing and repairs. It is the Eurozone’s earliest major consumer inflation.
German inflation rose to 2.6% in December, reigniting stagflation concerns for the ECB. Higher energy costs and rising wages are keeping inflation elevated, but it is expected to ease to 2-2.5% later in the year. Despite the inflation uptick, the ECB is likely to maintain its plan for gradual rate cuts.
Economists expect the upcoming reading to remain unchanged.
15:30- Canada: GDP m/m (CAD)
The Gross Domestic Product (GDP) is a key measure of the economic output of a country or region. It represents the total value of goods and services produced minus intermediate consumption like raw materials or components. GDP can be calculated using methods such as the value-added approach, which looks at the contribution of each sector to the economy. When GDP grows, it indicates economic expansion, while a slowdown or negative GDP may signal a recession. It’s used as a benchmark for the overall health of an economy.
Canada’s GDP grew 0.3% in Q3 2023, slowing from 0.5% in Q2. Year-on-year growth reached 1.5%. GDP per capita fell to $12,774 from $14,147 last year.
Analysts anticipate a reading of 0.2%.
15:30 – USA: Core PCE Price Index m/m (USD)
Personal Consumption Expenditures (PCE) measure the value of goods and services consumed by individuals and households. It’s a key indicator of consumer spending, which accounts for a large portion of economic activity in the US. The PCE is often used to track inflation trends, as it includes data on prices paid by consumers. The Federal Reserve uses the PCE price index as its preferred measure of inflation to guide monetary policy decisions, aiming to maintain price stability in the economy.
In November 2024, US personal income rose by 0.3%, while personal consumption expenditures (PCE) increased by 0.4%. The PCE price index rose 0.1%, with core inflation (excluding food and energy) also up 0.1%.
Analysts project that the figures will increase slightly by 0.2%.
Company Earnings (January 27 – 31)
Tuesday, January 28: GM (General Motors Company)
Tuesday, January 28: SBUX (Starbucks Corporation)
Wednesday, January 29: META (Meta Platforms, Inc)
Wednesday, January 29: MSFT (Microsoft Corporation)
Wednesday, January 29: TSLA (Tesla, Inc)
Thursday, January 30: AAPL (Apple Inc)
Thursday, January 30: BX (Blackstone Inc)
Thursday, January 30: CAT (Caterpillar Inc)
Thursday, January 30: INTC (Intel Corporation)
Thursday, January 30: V (Visa Inc)
Friday, January 31: CVX (Chevron Corporation)
Friday, January 31: XOM (Exxon Mobil Corporation)
Conclusion
With a packed week of economic releases and corporate earnings, market participants will closely monitor these events for insights into global economic conditions and business performance. Key data such as inflation figures, GDP growth rates, and interest rate decisions will provide valuable guidance for policymakers and investors alike, shaping expectations for the months ahead.