Economic Analysis

Japanese Interest Rate Decision: Tuesday morning. The Bank of Japan has left its negative interest rate of 0.1% unchanged for several years, as it maintains its massive bond buying scheme. The most notable change in recent times has been the pledge to keep rates low as long as necessary. Will he take bolder steps amid stagnating inflation? There are really few opportunities. Given the yen's recent weakness, the Bank of Japan is likely to keep the current interest rate intact.

British jobs report Tuesday, 12:30 pm. As tension escalates towards the next BoE decision on January 30, November's labor market figures may provide more insights. October's unemployment rate is 3.8%, around historical lows. However, wage growth further slowed and hit 3.2% after peaking at 3.9% in July. Without increasing salaries, the inflation rate is unlikely to rise.

  German economic sentiment: Tuesday, 01.00 pm. After long months in the negative zone, the German economic sentiment survey, with a strength of 300, turned positive in December, with a score of 10.7 - the fourth bullish surprise in a row. A similar result is likely in the early January poll. The changes in business confidence are looking ahead by the European Central Bank.

  Canada's Interest Rate Decision: Wednesday, 06:00 pm. The Bank of Canada left interest rates unchanged throughout 2019, and is unlikely to stray from this trend in the first decision of 2020. While the labor market was off its peak early last year, the latest jobs report was encouraging. Inflation - the numbers for December in shortly before the decision - was also good. In general, Governor Stephen Poloz, who will step down in June, is likely to leave interest rates unchanged and a sign of satisfaction with the Canadian economy.

  Australian jobs report: Thursday, 3:30 pm. The Australian labor market rebounded in November after falling in October, adding 39.9k jobs. The unemployment rate also improved, down from 5.3% to 5.2%, but it is still above the RBA's 5% target. In general, a satisfactory report may help the Aussie maintain its strength and push the next rate cut by the Reserve Bank of Australia.

  Eurozone rate decision: Thursday, decision at 03:45 pm, President Christine Lagarde will meet with the press at 04:30 pm. At its inaugural meeting, Lagarde promised to learn and announced that the bank would conduct a strategic review. After her predecessor, Mario Draghi, restored the QE program and cut interest rates, the new president had time to learn new jobs. The European Central Bank is unlikely to change policy at this juncture, but Lagarde’s comments on recent developments are set to shake the euro. Is economic growth rising? Or the recent numbers were just "green shoots" without any follow-up. The bank does not publish the expectations of new employees at this juncture, so Lagarde's general tone on the economy will set the new direction for EUR / USD.

  Eurozone PMI indices: Friday, 11:15 in France, 11:30 in Germany, and 12:00 in the entire eurozone. Markit's December direction numbers showed mostly growth - with the exception of the German manufacturing sector, which is the most important sector. The PMI fell to 43.7 points, well below the 50-point threshold separating expansion from deflation. Investors will want to know whether manufacturing is pulling economies down or whether consumers can continue to push them forward. Aside from the German manufacturing PMI, the composite figure for the entire euro area is interesting.

  UK PMI: Friday, 9:30. Like the continent, Britain's industry suffers from recession. However, the revised services sector figure for December was 50 points, which is an ideal balance between expansion and contraction. Is the UK's Largest Sector Recovering? Or will it retract? Given the recent negative GDP reading, disappointment cannot be ruled out.

All times are KSA