CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Asia Week Ahead: A trove of data

A data filled week lies ahead for markets while Q4 earning reports start to creep in as the markets gear up for year-end reporting. 

Source: Bloomberg

Ahead of US December’s non-farm payrolls data, we have seen the Federal Open Market Committee (FOMC) December meeting minutes knocking the USD down a notch as seen in the week-to-date recap below. With committee members appearing uncertain with regards to the effect of the incoming administration’s policies in invigorating the economy, the market took to selling the USD. This was coupled with a relatively neutral expectation towards the December jobs report.

Equities had meanwhile rose in the first week of the year, seeing broad-based gains stemming from the optimism in the markets. As goes January, so goes the year. It certainly does look bright for stock markets for the year though the week ahead may hold a different set of drivers. 

US markets

The latter half of the week had been all about currencies as the USD index saw its strength subside after touching a fresh 14-year high. The retreat gave way to a bout of short-squeeze for the offshore yuan, USD/CNH, reminiscent of the situation a year ago. Nevertheless, the USD had managed to retrace some losses against the yuan before the NFP release.

The week ahead will carry appearances from several Fed officials. Most notably, Federal Reserve Chair Janet Yellen will host a town hall meeting with educators on Thursday (Friday Asian hours). Trumping Fed Chair Yellen’s appearance in importance for the economy could be President-elect Donald Trump’s “general news conference” on Wednesday, January 11. Details have been kept vague, but investors would likely keep their eyes peeled for any policy mentions.

Separately, we would also receive updates on November’s wholesale inventories, JOLTs job openings, in addition to December’s PPI, retail sales and business inventories. Stronger results have been penciled in by the market for December’s retail sales in light of the holiday season, which in turn could help the USD up once again. Four major banks, including JPMorgan and Bank of America, would also be reporting their Q4 earnings on January 13.


Asian indicators

Over in Asia, Japan will be away on Monday for the Coming-of-Age day but returns on Tuesday with December’s consumer confidence data release and November current account data due Thursday. Of central banks, Bank of Korea will be the first to hold their central bank meeting and announce their interest rate decision on Friday, though no change has been expected. The South Korean central bank has previously announced that they plan to keep the monetary policy accommodative this year, a likely response to the slew of concerns for the South Korea economy.

China’s data will take will be the highlight for markets on Tuesday with both December consumer and production price indices due, the latter expected to extend the uptrend and potentially be a boost for markets. December’s trade data will also be released on Friday. The market consensus currently points to a return to decline for exports in USD terms. China’s December loan conditions would also be updated with the aggregate financing, new yuan loans and M2 due anytime between 10-15 January.

Other data released in the week ahead for Asia includes trade updates from Taiwan and Philippines. India will also report their inflation in December. For the local Singapore market, November retail sales data will also be due on Friday. 

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.  Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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