Key economic data to be released next week: inflation in the UK and EU, and Australian employment change.
Last week it was all about US economic data – inflation and retail sales were released last Wednesday, respectively, last Friday. As many economists expected, inflation in the United States did not peak yet, while retail sales disappointed in December.
The economic calendar is light in economic data from the United States in the week ahead. Moreover, US banks are closed on Monday as the country celebrates Martin Luther King’s day.
But light data from the United States does not mean that the week ahead will lack volatility. So here are three pieces of economic data to keep an eye on: UK inflation, EU inflation, and Australian unemployment.
On Wednesday, the UK inflation is expected to rise to 5.2% YoY from 5.1% previously. If we consider what happened in the United States last week, the risk that inflation will surprise the upside is material.
Because the United States is the largest economy in the world, inflation is being “exported” to its trading partners. Hence, on Wednesday, sterling traders are on the lookout as rising inflation may prompt the Bank of England to rise rates sooner.
One day later, the EU Final CPI data is due. The market expects the headline data to be unchanged on the month, at 5%, but the risk is similar to the one discussed earlier.
The core inflation data, which excludes energy, food, alcohol, and tobacco prices, matters more for euro traders. This is the ECB’s favorite measure of inflation, and the forecast is that it will come out at 2.6% on the month.
At this rate, it is already above the 2% definition of price stability that the ECB has. However, the central bank is not forecast to raise the rates from their current levels, so much higher inflation may change the market’s expectations.
For traders monitoring the Australian economy, this week brings essential economic data – the employment change and the unemployment rate. The Australian economy is expected to have created 60k new jobs in the previous month, and the unemployment rate is seen falling to 4.5% from 4.6% previous.
The post UK and EU inflation, Australian employment change – key economic data in the week ahead appeared first on Vantage Point Trading.
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