Ben Robson – The week of 20th-24th January 2020

Last week, US CPI rose to 2.3% in December, UK CPI for December fell to 1.3%, US retail sales increased by 0.3% in the month of December and UK retail sales fell. Chinese 4th quarter GDP figures held steady at 6.0% Y/Y.

By Ben Robson 

Articles of impeachment of US President Trump were delivered to the Senate and the US and China signed a trade deal. Stock markets in the US hit record highs after some strong bank results and currency markets did very little.

This week is an interesting week for data as the Bank of Japan, European Central Bank and Bank of Canada will issue interest rate decisions and Japan, Canada and New Zealand will release consumer price indexes of inflation. Australia reports its employment situation and Bank of England governor Carney will be speaking at Davos.

On Tuesday morning, the Bank of Japan is unlikely to change its interest rate policy with rates expected to stay on hold at negative 0.1%. The German ZEW survey which is released later in the morning is expected to rise to 15 for January, following last month’s print of 10.7. In the afternoon, Bank of England Governor Carney will be part of a panel in Davos.

On Wednesday, all eyes should be on Canada. First up, Canadian CPI will be released, expected to have risen to 2.3% Y/Y for December from 2.2% in November. Interest rates are out next with the consensus opinion that Canadian rates are likely to stay on hold at 1.75%. There’s a small chance of a surprise cut and Bank of Canada Governor Poloz will give his reasoning shortly after the announcement.

We wake up to Australian employment numbers on Thursday morning with analysts predicting a small rise in Australian employees of 11,000 and the unemployment rate steady at 5.2%. Be mindful of the impact of the terrible bushfires we’ve had this season which may possibly impact the data. Later in the morning, the European Central Bank is expected to leave European interest rates unchanged at 0.0%.

Early Friday morning New Zealand 4th quarter CPI is released with expectations for a year on year rise of 1.8%. Japanese CPI follows with expectations of a rise in the Y/Y number to 0.7 for December.

In the absence of any very important data from the US this week, it may be worth focusing on cross currency pairs in major currencies and particularly against the Canadian dollar. Wednesday being a big data day in Canada may well be a day of relative turbulence for the Canadian dollar in these ultra-low volatility markets.

Good luck and good trading!

Ben Robson is the CEO of Spectrex Commodities and author of Currency Kings- How Billionaire Traders Made Their Fortune Trading Forex And How You Can Too.

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