Fri, Feb 03, 2023 @ 17:00 GMT
HomeContributorsFundamental AnalysisWeek Ahead – Earnings Season Underway

Week Ahead – Earnings Season Underway

US

It will be a busy week filled with a wide range of economic indicators, lots of Fed speak, and earnings season heats up.  Wall Street will now not just fixate on inflation data, but also on how quickly the economy softens.  Traders will pay close attention to the Empire manufacturing index, retail sales, PPI, industrial production, NAHB housing market index, weekly jobless claims, and existing home sales data.

Fed speak will happen all week long and expectations are high for more members to signal they are comfortable with downshifting their tightening pace again.

Earnings season continues with more bank earnings, the airline’s report, Procter & Gamble earnings will include insights on pricing trends, and Fastenal reports.

EU 

The run-up to the February ECB meeting is going to bring immense focus on incoming data and central bank speak, with investors becoming increasingly hopeful that global interest rates may nearly be peaking and perhaps not as high as feared even a couple of weeks ago. On the former, the standout release will be the final inflation number for December while the ZEW surveys will also be of interest.

On the latter, the ECB minutes will be poured over, as will comments from President Christine Lagarde and colleagues towards the end of the week. Markets are still pricing in three 50 basis point hikes at the upcoming meetings but that could be pared back.

UK 

So it turns out the UK may have just about avoided a technical recession in 2022 thanks to the World Cup. The GDP data for November showed unexpected growth which, when combined with the 0.5% gain in October makes it unlikely that the economy will have fallen into a recession after all, barring surprise downward revisions or a shocking number in December. Perhaps Gareth Southgate will get that knighthood after all.

Ultimately, it makes no difference. The spending that boosted November’s number will probably simply be shifted from elsewhere. The cost-of-living crisis is squeezing the economy and will likely further intensify this year, potentially tipping the economy into recession, anyway. We’ll get a lot more data this week including unemployment, inflation, and retail sales.

Russia

No data or events are scheduled for next week so the focus will remain on developments in Ukraine.

South Africa

The currency has stabilized after tumbling last week amid speculation around the changing of the SARB mandate. While the ANC hasn’t given up hope, any changes are unlikely, for the foreseeable future, anyway. That leaves investors to focus on the inflation and retail sales data next Wednesday, the first of which still sits above the SARB 3-6% target range.

Turkey

The CBRT meets next week and frankly, I have no idea what they will do. Official inflation fell from 84.39% to 64.27% in December which the central bank could look to capitalise on, despite previously indicating it was done with its latest easing cycle.

Switzerland

The World Economic Forum takes place in Switzerland next week and on Friday, SNB Chair Thomas Jordan will be among many central bankers throughout the week making an appearance.

China

All eyes will be on China this week. To kick off the week, the PBOC is expected to cut its one-year MLF rate by 10 basis points to 2.65%.  On Tuesday, we see the impact Covid had on GDP, industrial production, retail sales, and fixed asset investment. Fourth quarter GDP is expected to drop from 3.9% to 1.5%, while December’s retail sales plunge from -5.9% to -12.0%.  At the end of the week, China is expected to cut its loan prime rates.

Much attention will remain on China’s Covid situation and whether the economic outlook continues to brighten with improving reopening trends.

India

Inflation has been falling and that is starting to make some traders doubt that the RBI will need to continue to raise rates.  The upcoming week contains wholesale price data that is expected to show disinflation trends remain. Trade data is also due.

Australia & New Zealand

China’s reopening momentum has been good news for both Australia and New Zealand. China-Australia relations are expected to return to a healthy and stable development, with China’s ambassador Xiao Qian recently commenting positively on China-Australia relations. The relationship has been constructive so far. The main economic release for Australia will be the December employment report.  Hiring is expected to slow down from 64,000 to 15,000.

For New Zealand, traders will pay close attention to the REINZ House Sales data, Food prices, and manufacturing PMI.

Japan

The Bank of Japan’s monetary policy decision is expected to keep rates on hold. Traders are still digesting the surprising decision to adjust its government bond yield curve control.  BOJ watchers are looking for hints that they could soon move toward normalization by the end of July.

Next week also focuses on the Japan PPI, machine tool orders, Tertiary industry index, core machine orders, industrial production, and trade data.

Singapore

Second-tier data includes the release of non-oil domestic exports for December.

Economic Calendar

Saturday, Jan. 14

Economic Events

  • Second and final day of voting for Czech president
  • Assistant Trade Representative McCartin leads a US delegation in trade talks with Taiwan counterparts in Taipei.

Sunday, Jan. 15

Economic Data/Events

  • No major events expected

Monday, Jan. 16

Economic Data/Events

  • US markets closed for Martin Luther King Day
  • Australia inflation gauge
  • Canada existing home sales
  • China property prices, medium-term lending
  • India wholesale prices
  • Japan PPI, machine-tool orders
  • UK Rightmove house price index
  • The World Economic Forum’s annual meeting kicks off in Davos, Switzerland
  • EU finance ministers meet in Brussels

Tuesday, Jan. 17

Economic Data/Events

  • US Empire State manufacturing survey
  • Australia consumer confidence
  • Canada CPI, housing starts
  • China retail sales, industrial production, GDP, surveyed jobless rate
  • Germany CPI, ZEW survey expectations
  • Italy CPI
  • Japan tertiary industry index
  • Mexico international reserves
  • New Zealand house sales
  • Singapore trade
  • South Korea money supply
  • UK jobless claims, unemployment
  • Fed’s Williams gives speaks at an event about equitable growth hosted by the bank
  • ECB’s Centeno participates in a panel at the World Economic Forum in Davos
  • Big earnings from Goldman Sachs, Morgan Stanley, and United Airlines

Wednesday, Jan. 18

Economic Data/Events

  • US retail sales, PPI, industrial production, business inventories, MBA mortgage applications, cross-border investment
  • Fed release Beige Book
  • BOJ rate decision: Expected to keep rates on hold
  • Eurozone CPI
  • South Africa CPI
  • UK CPI
  • Canada industrial product prices
  • Italy trade
  • Japan machinery orders, industrial production
  • New Zealand card spending
  • South Africa retail sales
  • Taiwan jobless rate, GDP
  • Thailand car sales
  • NATO Military Committee in Chiefs of Defence session opens
  • Fed’s Bostic gives welcoming remarks at a conference on model risk management hosted by the bank
  • Fed’s Logan speaks at the University of Texas Austin McCombs School of Business
  • Fed’s Harker speaks at the Lyons CEEE Economic Forecast event
  • Alcoa report earnings

Thursday, Jan. 19

Economic Data/Events

  • US housing starts, initial jobless claims, Philadelphia Fed index
  • Norway Rate Decision: May hold rates or deliver a 25bp rate increase
  • Turkey Rate Decision:  Expected to keep the one-week repo rate unchanged at 9.00%
  • Argentina trade
  • Australia unemployment
  • China Swift global payments
  • Japan trade
  • New Zealand food prices
  • Spain trade
  • ECB publishes the account of its December 2022 policy meeting
  • ECB President Christine Lagarde speaks in a panel at World Economic Forum in Davos
  • ECB’s Schnabel speaks in a webinar on monetary policy
  • Fed’s Collins speaks at a conference on housing hosted by the bank
  • Fed’s Williams speaks at an event hosted by the Fixed Income Analyst Society in NY
  • France’s main labor unions’ first day of strikes over the government’s plan to raise the retirement age
  • Procter & Gamble and Netflix report earnings

Friday, Jan. 20

Economic Data/Events

  • US existing home sales
  • BOJ announce outright purchase total of government securities
  • Japan CPI
  • Canada retail sales
  • China loan prime rates
  • Germany PPI
  • Mexico retail sales
  • New Zealand PMI, net migration
  • Thailand foreign reserves, forward contracts
  • UK retail sales
  • ECB President Christine Lagarde and French Finance Minister Bruno Le Maire speak on a panel in Davos
  • Schlumberger and American Airlines report earnings

Sovereign Rating Updates

  • Hungary (Fitch)
  • Ireland (Fitch) – Norway (Fitch)
  • Austria (DBRS)
  • EFSF (DBRS)
  • ESM (DBRS)
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