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FX Week Ahead: Trump’s Press Conference, Yellen Speaks

FX Week Ahead: Trump’s Press Conference, Yellen Speaks

The second trading week of the year will see mostly second tier data from across the major economies after a rather busy start the week before. Still, despite the lack of any key economic events, the focus will be on the speeches from the U.S. President-elect Donald Trump and various Fed members. In Australia, retail sales figures will be closely watched while China will be releasing the inflation figures for December. Here’s a brief overview of the key economic events this week.

Fed speech and press conference by President-elect Trump

The lack of any big market moving events this week will be made up for by speeches from various FOMC members including Fed Chair, Janet Yellen during the week alongside a scheduled press conference from President-elect Donald Trump. After winning the U.S. presidential elections in November, this Wednesday’s press briefing will be the first official press conference. While not much is known on what to expect from the press conference, investors will be closely monitoring the press conference for any references to fiscal spending which has contributed a lot to the recent uptick in inflation expectations and the resulting speculative rally.

So far, the President-elect has managed to keep some of the planned jobs from Ford and Carrier being moved to Mexico, in what could be seen as signs of staying true to some of the promises made during his election campaign. Thus, the speculation of an increase in spending is likely to further fuel the rally in the U.S. dollar.

Besides the official press conference, FOMC members will be speaking this week. Speaking engagements include FOMC members, Evans, Harker and a late Thursday speech by Janet Yellen.

On the economic front, retail sales and PPI numbers are expected to come out on Friday.

UK Manufacturing Production; Supreme Court ruling

In the UK, manufacturing and industrial production figures will be released on Wednesday in an otherwise quiet trading week. Manufacturing production declined 0.9% in October while industrial production fell 1.3% on a month over month basis during the same period with most of the declines coming from a decrease in production from the mining and quarrying sectors alongside the maintenance in the oil and gas exploration industry.

Although the timing of the Supreme Court’s ruling has not yet been defined, there is speculation that the Supreme Court will be releasing its verdict on the government’s appeal on the Brexit issue on whether the UK government can trigger Brexit without parliamentary approval. The verdict is expected to be released in “early January” which means either this week or next week at the latest.

ECB Meeting minutes, industrial production numbers

A slow week from the Eurozone, data is mostly confined to the second tier. Industrial production numbers from Germany, France and Italy are scheduled for the week while France will be reporting the final inflation figures. On Thursday, the ECB’s monetary policy meeting accounts will be released which will show details on the ECB’s meeting held in early December 2016, where the central bank announced a cut to its monthly bond purchases while extending the QE program. However, the data is unlikely to push the markets much this week.

China to report inflation figures for December

Economic data from China this week will see the final inflation figures for the month of December. Due for release on Tuesday, there is a strong consensus for an upside surprise in inflation on account of recovery in the commodity prices including higher oil prices and a broadly weaker yuan during the period. Later in the week, new bank loans data is expected to show an increase to 663 billion CNY which could be seen pushing the total bank lending in 2016 to 12.3 trillion. On Friday, the foreign trade data will be released.

by John Benjamin, Orbex

John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.

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