Investing.com – The U.S. will see a relatively quiet week in terms of economic releases, with a report on the housing sector expected to draw the most attention.
With little economic data expected during the holiday-shortened week, earnings could be the main event for markets with many large financial institutions reporting.
U.S. markets will remain closed on Monday for Martin Luther King Day.
Elsewhere, China is slated to release what will be closely watched fourth-quarter growth data, which is expected to confirm a very modest slowdown is taking place in the world’s second-largest economy.
In Europe, investors will await monthly inflation data to assess how fast the European Central Bank will start unwinding its asset purchase program in the wake of last week’s hawkish ECB meeting minutes.
Meanwhile, in the U.K., traders will focus on consumer price inflation data to gauge how it will impact the Bank of England’s view on monetary policy in the coming months.
A monetary policy announcement from the Bank of Canada will also garner some attention.
Ahead of the coming week, Investing.com has compiled a list of the five biggest events on the economic calendar that are most likely to affect the markets.
1. U.S. Housing Data
The Commerce Department is to publish a report on building permits and housing starts for December at 8:30AM ET (1330GMT) on Thursday.
The data is expected to show that permits fell 1.0% to 1.290 million last month, while housing starts are forecast to show a decline of 1.7% to 1.275 million. Both reached a more than decade high in November.
Besides the housing-related data, this week’s calendar also features surveys on manufacturing conditions in the Philadelphia and New York regions as well as industrial production figures and preliminary Michigan consumer sentiment figures.
The Fed’s Beige Book, as well as speeches from Chicago Fed President Charles Evans, Cleveland Fed Boss Loretta Mester and Fed Governor Randall Quarles, will also be in focus.
The majority of economists believe that the Federal Reserve will hike rates in March with a second move higher arriving in June, according to Investing.com’s Fed Rate Monitor Tool.
Elsewhere, in the stock market, this week marks the first big week of the fourth-quarter earnings season, with Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC), Citigroup (NYSE:C), Morgan Stanley (NYSE:MS) and American Express (NYSE:AXP) among some of the names reporting results. IBM (NYSE:IBM) and UnitedHealth (NYSE:UNH) are also on the docket.
For the fourth-quarter, earnings are expected to grow by 12.1%, according to Thomson Reuters. Of the roughly two dozen companies that have reported so far, about three in four have beaten expectations.
2. China Q4 GDP
China will be the first major economy to report fourth-quarter growth data when it publishes its GDP numbers at around 0200GMT on Thursday (9:00PM ET Wednesday).
The report is expected to show the world’s second-largest economy grew 6.7% in the final three months of the year, easing slightly from the previous quarter’s pace of 6.8%.
The Asian nation will also publish data on December industrial production, fixed asset investment and retail sales along with the GDP report.
Trade figures released last week showed that China’s exports and imports growth slowed in December, adding to signs of ebbing economic momentum as the government extends a crackdown on financial risks and factory pollution.
A Chinese slowdown is one of the major risks to continued global growth.
3. Euro Zone Consumer Prices
The euro zone will publish final inflation figures for December at 1000GMT (5:00AM ET) Wednesday. The report is expected to confirm that consumer prices rose 1.4%, 0.1% slower than in the previous month.
Final inflation figures for Germany and Italy are also due this week.
Minutes from the ECB’s December meeting published last week revealed that policymakers could revisit their communication stance in early 2018, sparking speculation that the bank is preparing to reduce its vast monetary stimulus program.
The ECB is due to hold its next policy meeting on January 25.
4. UK CPI Figures
The UK Office for National Statistics will release data on consumer price inflation for December at 0930GMT (4:30AM ET) on Tuesday. Analysts expect annual CPI to edge down to 3.0% from November’s near six-year high of 3.1%. Core inflation is also forecast to ease slightly, from 2.7% to 2.6%.
In addition to the inflation report, traders will focus on monthly retail sales data due Friday for further indications on the continued effect that the Brexit decision is having on the economy.
On the central bank front, speeches by Bank of England policymakers Silvana Tenreyro and Michael Saunders will be on investors’ minds as they search for more hints on the timing of the next policy move.
Politics is also likely to be in focus, as market participants keep an ear out for any news regarding the ongoing Brexit negotiations.
The BoE raised interest rates for the first time in more than ten years in November, but said it sees only gradual rises ahead as Britain prepares to leave the European Union.
5. Bank of Canada Rate Decision
The Bank of Canada’s latest interest rate decision is due at 10:00AM ET (1500GMT) on Wednesday, with most experts expecting the central bank to raise its benchmark rate by 25 basis points to 1.25%.
If confirmed, it would be the third rate hike over the past six months, as recent data has painted a robust picture of the Canadian economy.
However, some analysts are warning that the BOC may decide to wait a little longer before hiking rates again so soon.
The central bank raised rates in July and September for the first time in seven years but has since worried about a number of uncertainties that could have an impact on the country’s economy, including renegotiation of the North American Free Trade Agreement.