The Global Markets Weekly – 1/20/14

Posted January 20, 2014 by rvillareal

Quiet Backdrop

Emerging markets will get a bit more of the spotlight than usual this week, with a heavy schedule of indicators and events coming against the backdrop of relatively quiet calendars in the major currency areas.  Among important emerging markets, there will be two major GDP releases, in China and Korea, five industrial production releases, in China, Russia, Poland, Taiwan and Argentina, and three central bank rate-decision meetings—two of them quite fraught—in Turkey, Hungary, and Thailand.[private]

Meanwhile, the U.S. looks to be extraordinarily tranquil, apart from the unfolding company earnings season, with Fed officials kept silent by the pre-FOMC blackout and a few secondary indicator releases lumped on Thursday.   The Eurozone is modestly more active, with early-round January purchasing-manager indexes coming Thursday and ECB President Draghi speaking, as a Davos man, on Friday.  Japan has only some minor data releases and what should be a fairly routine BOJ meeting at midweek.

• U.S.: The holiday-shortened week brings little new information, with data releases limited to December existing home sales, which give an important housing-market update, and the weekly unemployment insurance report (initial claims), a real-time reading on the suddenly uncertain labor market.  Both releases arrive Thursday.
• Eurozone:  There will be the usual clamor regarding the array of business survey numbers due this week as they provide a first glimpse as to what may be happening to the real economy in early-2014.  In particular, the January PMI Flashes due on Thursday will be examined all the more acutely, especially given the mixed readings seen in the last few months.
• UK:  The coming week has both key data and a much-awaited BoE insight.  As for the latter, the main interest will be the minutes to the January MPC meeting due this Wednesday, but with the Labor Market Report (released alongside) perhaps the key area of interest.
•  Japan: The only big item in the week is the monthly Bank of Japan monetary policy meeting (Wed), with data releases limited to the generally low-impact revised monthly industrial production data (Mon), this time for November, and November all-industry activity data (Wed).
• Emerging Markets/Regions:  In China, real GDP data (Mon) are due.  By all indications, a rather steady pace of growth has been maintained in the past few months.     In Korea, fourth quarter real GDP (Thu) arrives, with all available data pointing to a strong result—continuing a trend highly likely to extend into the foreseeable future.  In Mexico, mid-month inflation (Thu) is likely to bring annual inflation marginally and temporarily above the 4% Y/Y mark.  In Brazil, the current account balance and formal-sector job creation are on the calendar.  In Turkey, the TCB meets (Tue). There will probably be no changes: the interest rate corridor will be left unaltered, and  there will be no decision to move borrowing costs higher within the existing corridor.

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