Highlights
Major central banks are expected to stand pat this week, except for the People's Bank of China, which is likely to lower key loan rates to support economic recovery (some forecasters expect no change). The US GDP data for the fourth quarter on Thursday is expected to show a notable slowdown from the third quarter but solid enough to keep soft-landing expectations alive.
The Bank of Japan is expected to maintain its easing stance at least until April, when officials may be able to see clearer signs of sustained wage and service price increases. The Bank of Canada, on the other hand, is set to leave its restrictive policy stance unchanged for now as policymakers need to be more confident that inflation is coming down to their 2 percent target from above 3 percent. The European Central Bank is also seen on the sidelines before considering a rate cut months ahead while assessing the effects of its past rate hikes.
On Monday (8:15 p.m. EST Sunday/0115 GMT Monday), China's central bank is expected to cut both its 1-year and 5-year loan prime rates by 10 basis points each, to 3.35 percent and 4.10 percent, respectively, after holding steady in December.
Before the US markets open, Hong Kong's CPI data is expected to show the annual inflation rate eased further to 2.4 percent in December from 2.6 percent in November and 2.7 percent in October but that would still above September's 2.0 percent.
In the US, the index of leading economic indicators for December is expected to extend its long streak of decline, down 0.3 percent on the month, following a 0.5 percent drop in November. This index has long been signaling a coming recession but other data point to a soft-landing of the economy, thanks to resilient consumption and labor market conditions.
The Bank of Japan board is widely expected to retain its guidance in a unanimous vote that it will"patiently continue with monetary easing" in order to"achieve the price stability target of 2 percent in a sustainable and stable manner, accompanied by wage increases." To this effect, it is likely to keep the targets of minus 0.1 percent for the short-term policy rate and"around zero percent" for the 10-year bond yield for now.
Market expectations for a policy change in January or March have receded quickly in light of the magnitude 7.6 earthquake on Jan. 1 that killed more than 230 people and caused damage to nearly 29,000 homes in Ishikawa Prefecture along the Japan Sea coast, leaving over 15,000 people still in evacuation. Official remarks have also led to the conviction that the BoJ board will take a cautious approach to confirming the emergence of a positive cycle between wage hikes and gradual 2 percent inflation.
The Bank of Japan is expected to maintain its easing stance at least until April, when officials may be able to see clearer signs of sustained wage and service price increases. The Bank of Canada, on the other hand, is set to leave its restrictive policy stance unchanged for now as policymakers need to be more confident that inflation is coming down to their 2 percent target from above 3 percent. The European Central Bank is also seen on the sidelines before considering a rate cut months ahead while assessing the effects of its past rate hikes.
On Monday (8:15 p.m. EST Sunday/0115 GMT Monday), China's central bank is expected to cut both its 1-year and 5-year loan prime rates by 10 basis points each, to 3.35 percent and 4.10 percent, respectively, after holding steady in December.
Before the US markets open, Hong Kong's CPI data is expected to show the annual inflation rate eased further to 2.4 percent in December from 2.6 percent in November and 2.7 percent in October but that would still above September's 2.0 percent.
In the US, the index of leading economic indicators for December is expected to extend its long streak of decline, down 0.3 percent on the month, following a 0.5 percent drop in November. This index has long been signaling a coming recession but other data point to a soft-landing of the economy, thanks to resilient consumption and labor market conditions.
The Bank of Japan board is widely expected to retain its guidance in a unanimous vote that it will"patiently continue with monetary easing" in order to"achieve the price stability target of 2 percent in a sustainable and stable manner, accompanied by wage increases." To this effect, it is likely to keep the targets of minus 0.1 percent for the short-term policy rate and"around zero percent" for the 10-year bond yield for now.
Market expectations for a policy change in January or March have receded quickly in light of the magnitude 7.6 earthquake on Jan. 1 that killed more than 230 people and caused damage to nearly 29,000 homes in Ishikawa Prefecture along the Japan Sea coast, leaving over 15,000 people still in evacuation. Official remarks have also led to the conviction that the BoJ board will take a cautious approach to confirming the emergence of a positive cycle between wage hikes and gradual 2 percent inflation.
Definition
Market Focus details key factors in the coming day that will impact the economic outlook and the financial markets. These include central bank events, economic indicators, policymaker speeches as well as expected political and corporate developments.
Description
Keeping up-to-date with event schedules and the economic calendar is key to understanding the global financial system. Econoday's Market Focus allows investors and policymakers to carefully track what will be making news and moving the financial markets in the coming day.
