Weekly Market News 10-14 January

Weekly Market News 10-14 January

The week ahead packs a wealth of economic data to watch with inflation numbers out of the US and China expected to be the highlights. December US retail sales and industrial production will also be eagerly awaited, while in Europe, the UK November GDP data plus eurozone industrial production and unemployment rate are likely to be the key data to watch.

What to watch

North America: US inflation, retail sales and industrial production

December US consumer prices, producer prices, retail sales and industrial production will all be released next week with the focus remaining squarely on the inflation data. The latest IHS Markit US Manufacturing PMI revealed that manufacturing output growth picked up slightly in December but remained constrained by supply shortages, though the rate of cost inflation eased to the softest since June. Composite PMI also showed that selling prices rose steeply but at the slowest pace in three months, signaling the likelihood of a softer CPI reading in December. Consensus estimates currently point to 0.4% for the headline CPI reading.

Europe: UK November output data, eurozone industrial production, unemployment rate

A series of updates from the UK will be due next week, including the November GDP data. According to the November IHS Markit / CIPS UK Composite PMI, output growth eased slightly in November. Service sector growth remained much stronger than the recovery in manufacturing production amid supply constraints, though December data have shown the economy slowing further amid the surge in COVID-19 cases.

In the eurozone, November industrial production and unemployment data will be released in the coming week. While demand remained strong, manufacturing PMI output data pointed to restricted production growth in November that may well be reflected in next week’s official data release.

Asia-Pacific: China December inflation and loan growth data

China’s inflation data will be closely watched next week after the Caixin China General Manufacturing PMI data showed input cost inflation cooling to a 19-month low, which should see producers price inflation ease.

Composite PMI data meanwhile suggest that overall inflationary pressure also moderated, placing the attention on CPI data, following the November sharper-than-expected slowing to 2.3%.

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