Important information regarding the up and coming housing market. Unemployment, selling and buying are all connected so please read on for important information by Ilian Yotov.
In the week ahead, the U.S. housing reports coupled with inflation and economic growth data from China, will shed light on whether there is a recovery in the U.S. housing market and could confirm the expectations that the fastest-growing economy in the world may be slowing down.
In preparation for the new trading week, here is the outlook for the Top 10 spotlight economic events that will move the markets around the globe.
1. GBP- U.K. CPI- Consumer Price Index, the main measure of inflation preferred by the Bank of England, Tues., Jan. 18, 4:30 am, ET.
The U.K. inflationary pressures could remain stubbornly above the Bank of England’s 3.0% ceiling for another month with the consumer inflation gauge forecast to rise by 3.3% y/y in December from 3.3% y/y in November.
2. EUR- Germany ZEW Economic Sentiment Index, a leading indicator of economic conditions and business expectations in the Euro-zone’s largest economy, Tues., Jan. 18, 5:00 am, ET.
The consensus forecasts are pointing to an increase in the ZEW index with a reading of 6.0 compared with 4.3 in the previous month.
3. CAD- Bank of Canada Interest Rate Announcement, Tues., Jan. 18, 9:00 am, ET.
Although the Bank of Canada is expected to keep rates on hold at this meeting, with the economy improving and commodity prices and inflationary pressures on the rise, it would be important to find out if policy makers feel that it might be prudent to soon resume the campaign of interest rate hikes, which started in 2010.
4. GBP- U.K. Jobless Claims and Unemployment Rate, the main gauges of employment trends and labor market conditions, Wed., Jan. 19, 4:30 am, ET.
The U.K. labor market could see a month of rising claims for unemployment benefits by up to 2,000 in December from -1,200 in November, while the unemployment rate stays unchanged at 7.9%.
5. USD- U.S. Housing Starts, a leading indicator of housing market activity measuring construction of new residential properties, Wed., Jan. 19, 8:30 am, ET.
Throughout last year, the U.S. housing data has been either weak or mixed, at best, and this report could have a similar outcome with the housing starts registering a slight decline to 554K in December from 555K in November.
6. NZD- New Zealand CPI- Consumer Price Index, the main measure of inflation, Wed., Jan. 19, 4:45 pm, ET.
New Zealand’s biggest trading partner, Australia, is dealing with terrible floods which could slow economic growth this quarter and may also have a negative impact on the economy of New Zealand. However, the Kiwi dollar could attract some bids on expectations for further RBNZ rate hikes to curb rising inflationary pressures, as the inflation gauge is forecast to double in Q4 2010 to 2.3% q/q from 1.1% in the previous quarter.
7. CNY- China CPI- Consumer Price Index, the main measure of inflation, and GDP- Gross Domestic Product, the main gauge of economic activity and growth, Wed., Jan. 19, 9:00 pm, ET.
The Chinese government’s attempts to cool things off in the world’s fastest-growing economy may have succeeded with inflationary pressures forecast to pull back to 4.7% in December from 5.1% in November and economic growth slowing to 9.4% q/y from a previous reading of 9.6% q/y.
8. USD- U.S. Jobless Claims, an important gauge of employment trends and labor market conditions, Thurs., Jan. 20, 8:30 am, ET.
After last week’s unexpected spike in the number of Americans filing applications for unemployment benefits, the jobless claims could resume their trend of improvement from the last couple of months with a reading of 423K from 445K in the previous week. To indicate a significant decline in unemployment, economists estimate that jobless applications would need to fall to 375K or below.
9. USD- U.S. Existing Home Sales, the main gauge of the condition of the U.S. housing market measuring the number of closed sales of previously constructed homes, condominiums and co-ops, Thurs., Jan. 20, 10:00 am, ET.
This report could instill some optimism for future improvement in the U.S. housing market with sales of existing homes expected to increase to 4.83M in December from 4.63M in November.
10. EUR- Germany IFO Institute Business Climate and Expectations Index, a leading indicator of economic conditions and business expectations in the Euro-zone’s largest economy, Fri., Jan. 21, 4:00 am, ET.
Following a stronger ZEW sentiment survey, the German IFO index could confirm the positive outlook with a reading of 110.0 in December, compared with 109.9 in the previous month.
In the week ahead, the U.S. housing reports coupled with inflation and economic growth data from China, will shed light on whether there is a recovery in the U.S. housing market and could confirm the expectations that the fastest-growing economy in the world may be slowing down.
In preparation for the new trading week, here is the outlook for the Top 10 spotlight economic events that will move the markets around the globe.
1. GBP- U.K. CPI- Consumer Price Index, the main measure of inflation preferred by the Bank of England, Tues., Jan. 18, 4:30 am, ET.
The U.K. inflationary pressures could remain stubbornly above the Bank of England’s 3.0% ceiling for another month with the consumer inflation gauge forecast to rise by 3.3% y/y in December from 3.3% y/y in November.
2. EUR- Germany ZEW Economic Sentiment Index, a leading indicator of economic conditions and business expectations in the Euro-zone’s largest economy, Tues., Jan. 18, 5:00 am, ET.
The consensus forecasts are pointing to an increase in the ZEW index with a reading of 6.0 compared with 4.3 in the previous month.
3. CAD- Bank of Canada Interest Rate Announcement, Tues., Jan. 18, 9:00 am, ET.
Although the Bank of Canada is expected to keep rates on hold at this meeting, with the economy improving and commodity prices and inflationary pressures on the rise, it would be important to find out if policy makers feel that it might be prudent to soon resume the campaign of interest rate hikes, which started in 2010.
4. GBP- U.K. Jobless Claims and Unemployment Rate, the main gauges of employment trends and labor market conditions, Wed., Jan. 19, 4:30 am, ET.
The U.K. labor market could see a month of rising claims for unemployment benefits by up to 2,000 in December from -1,200 in November, while the unemployment rate stays unchanged at 7.9%.
5. USD- U.S. Housing Starts, a leading indicator of housing market activity measuring construction of new residential properties, Wed., Jan. 19, 8:30 am, ET.
Throughout last year, the U.S. housing data has been either weak or mixed, at best, and this report could have a similar outcome with the housing starts registering a slight decline to 554K in December from 555K in November.
6. NZD- New Zealand CPI- Consumer Price Index, the main measure of inflation, Wed., Jan. 19, 4:45 pm, ET.
New Zealand’s biggest trading partner, Australia, is dealing with terrible floods which could slow economic growth this quarter and may also have a negative impact on the economy of New Zealand. However, the Kiwi dollar could attract some bids on expectations for further RBNZ rate hikes to curb rising inflationary pressures, as the inflation gauge is forecast to double in Q4 2010 to 2.3% q/q from 1.1% in the previous quarter.
7. CNY- China CPI- Consumer Price Index, the main measure of inflation, and GDP- Gross Domestic Product, the main gauge of economic activity and growth, Wed., Jan. 19, 9:00 pm, ET.
The Chinese government’s attempts to cool things off in the world’s fastest-growing economy may have succeeded with inflationary pressures forecast to pull back to 4.7% in December from 5.1% in November and economic growth slowing to 9.4% q/y from a previous reading of 9.6% q/y.
8. USD- U.S. Jobless Claims, an important gauge of employment trends and labor market conditions, Thurs., Jan. 20, 8:30 am, ET.
After last week’s unexpected spike in the number of Americans filing applications for unemployment benefits, the jobless claims could resume their trend of improvement from the last couple of months with a reading of 423K from 445K in the previous week. To indicate a significant decline in unemployment, economists estimate that jobless applications would need to fall to 375K or below.
9. USD- U.S. Existing Home Sales, the main gauge of the condition of the U.S. housing market measuring the number of closed sales of previously constructed homes, condominiums and co-ops, Thurs., Jan. 20, 10:00 am, ET.
This report could instill some optimism for future improvement in the U.S. housing market with sales of existing homes expected to increase to 4.83M in December from 4.63M in November.
10. EUR- Germany IFO Institute Business Climate and Expectations Index, a leading indicator of economic conditions and business expectations in the Euro-zone’s largest economy, Fri., Jan. 21, 4:00 am, ET.
Following a stronger ZEW sentiment survey, the German IFO index could confirm the positive outlook with a reading of 110.0 in December, compared with 109.9 in the previous month.
About the author: All Things Forex
Ilian Yotov is the creator of The Quarters Theory, FX Strategist and internationally published author of "The Quarters Theory: The Revolutionary New Foreign Currencies Trading Method". Ilian is one of the leading Forex educators in the world and has trained thousands of Forex traders... More
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