The following releases will have a disproportionate impact on the market next week:
Chinese Exports: The Chinese slowdown was one of the biggest stories last year, and will continue to have important ramifications this year. While the economy is still growing at a solid rate of around 7%, there is no denying that as China’s engine slows, so too will demand for raw materials. Exports were the previous engine of Chinese growth, although, as the chart shows, that pace of increase was low during 2014.
UK CPI and PPI: With the strong UK growth rate, it’s only a matter of time before the BOE raises interest rates. But with inflation declining, the BOE has far more policy room as to when they’ll start increasing.
EU Industrial Production: While this statistic has been increasing, it has been doing so at a far lower rate than that recorded before the recession. Considering the weak reading of the Markit PMU numbers, don’t expect a strong showing.
US Retail Sales: This release will give us some insight into how strong or weak the holiday selling season was. With the solid 3Q GDP print of 5% and strong auto sales, analysts will be expecting a big number.
Japan Corporate Goods Price Index: In pumping up the monetary base, the BOJ had an easy policy win that increased inflation. However, the pace of that increase has been slowing over the last 6-8 months, so keep your eye out for a continuation of that slowdown.
Australian Unemployment: Unemployment in Australia has been slowing ticking up over the last 8 months, largely as a result of a slowdown in the ending of massive raw material projects. As with all employment reports, the inner numbers will probably be more important.
US CPI and PPI: The latest Fed Meeting Minutes implied the Fed will wait until at least the late spring before raising interest rates. However, with oil dropping sharply, expect this release (and all other CPIs released) to show a sharper slowdown, giving the central bank that much more room to maneuver.
US Industrial Production and Capacity Utilization: These are still two of the best coincident economic indicators used by economists. Overall US IP growth has been solid since the end of the recession.
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