What to expect in global markets this week

By Alex Moffat. Published at Jan 21, 2019, in Market Wrap

1pm looks to be the time when everything is happening this week.

For instance, at 1pm today, we get the December quarter GDP, plus December retail sales and industrial production data for China.

Economists are expecting GDP to have grown by 1.5% for the December quarter and 6.4% year-on-year.

The Bank of Japan is also updating us on its monetary policy deliberations at 1pm on Wednesday, and the World Economic Forum kicks off in Davos on Wednesday evening our time.

Of course, there are other big events happening (or not) at other times this week.

11:30 on Thursday brings the local employment report for December; economists have forecast a gain of 20,000 jobs and the unemployment rate to remain steady at 5.1%. Late on Thursday evening, the European Central Bank announces its monetary policy decision with no change expected.

China has revised its 2017 economic growth down to 6.8% from 6.9% — or down from CNY82.7 trillion (USD12.1 trillion) to CNY82.1 trillion (USD12 trillion). This may seem like small fry, but when you add on the zeros, it is meaningful.

The strong rally in equity markets on Friday has had the usual effect on bond yields; the US curve nudged higher by 5 basis points on the 2 year and 4 basis points on the 10 year narrowing the curve to 17 basis points.

Base metals all put in a good showing on Friday, with 3 month nickel up 2% ay USD11,820 and 3 month copper up by 1% at USD6,052; still a long way off the USD10,160 per tonne reached in late 2001. Oil pushed higher, too, closing US trading at USD53.97 a barrel, a rise of 3.1%.

Speaking of the US, Donald Trump has cancelled the American delegations trip due to the government shutdown.

British retail sales data for December was released on Friday evening and showed a decline of 0.9%. It suggests that shoppers did the bulk of their Christmas shopping in November which was up a solid 1.3% (revised). The British Retail Consortium declared December the “worst Christmas in a decade”.

Index futures are up by 43 points and the Australian Dollar is pretty steady at USD0.7165

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