A review of the week past and the week ahead

Charts (3)

What mattered last week:

  • The S&P500 closed the week down -1.5%, falling from record highs the previous week.
  • On fears, the spread of the more contagious UK, South African strands of the coronavirus will see longer lockdowns.
  • And that President-elect Joe Biden's $1.9 trillion fiscal stimulus plan will see interest rates rise.
  • Economic data was disappointing as initial jobless claims came in higher than forecast.
  • Volatility, as measured by the VIX index rose to 24.3.
  • U.S. 10-year yields consolidated the prior week's gains closing near 1.08%.
  • Gold fell -1.12%, to close near $1828.
  • Crude oil closed mostly unchanged at $52.42/bbl, supported by Saudi output cuts.
  • The ASX200 eased -0.63% lower to close at 6715.4.
  • The AUDUSD fell -0.75% to close near .7700, as the US dollar clawed back some of its recent losses.

For the week ahead, the key events are:

Australia: HIA new home sales (Tuesday), Westpac consumer confidence (Wednesday), labour force (Thursday), Markit manufacturing PMI (Friday).

  • Labour force (Thursday): Employment is expected to rise by 50k with the unemployment rate falling from 6.8% to 6.7%. The participation rate is expected to remain at historical highs at 66.1%.

New Zealand: NZIER business confidence and global dairy trade (Tuesday), business NZ PMI and Q4 inflation (Friday).

China: Industrial production, retail sales, Q4 GDP, fixed asset investment, and employment (Monday), PBOC interest rate meeting (Wednesday).

  • Q4 GDP (Monday): Q4 GDP is expected to show a 3.2% q/q gain resulting in GDP growth accelerating to 6.1% y/y from 4.9%.

Japan: Balance of trade, BoJ interest rate decision (Thursday), inflation, and Jibun bank flash PMI’s (Friday).

U.S: Joe Biden's inauguration (Wednesday), building permits, housing starts, jobless claims (Thursday), Markit PMI’s and homes sales (Friday).

US earnings season continues with reports due from companies including Netflix, Bank of America, Goldman Sachs, and Morgan Stanley.

Canada: Housing starts, (Tuesday), inflation and BoC interest rate meeting (Wednesday) retail sales (Friday).

Euro Area: ECB interest rate meeting (Thursday), German and EA Markit flash PMI’s (Friday).

  • ECB interest rate meeting (Thursday): The ECB is expected to leave monetary policy unchanged at this meeting after extending its quantitative easing and cheap bank lending programs in December.

UK: Inflation (Wednesday), retail sales, and Markit flash PMI’s (Friday).  


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