Global Growth Concerns Spill Into 2019

By George Walker

Equity markets had a mixed first week to the start of 2019, coming off their worst year in a decade, with weak data in Asia and Europe confirming fears of a global economic slowdown while the U.S. government shutdown drags on. China’s factory activity contracted for the first time in 19 months in December, hit by the Sino-U.S. trade war, with the weakness spilling over to other Asian economies. Adding to the concerns was Apple Inc., who took the rare step of cutting its quarterly sales forecast, with chief executive Tim Cook blaming slowing iPhone sales in China. Apple is set to report their Q1 earnings release later in the month.

Key data out of the world’s second largest economy continues to come next week in the form of Chinese Consumer Price Index (inflation figures) on Wednesday at 01:30. On Thursday we will then get Producer Price Index and more importantly, Chinese Gross Domestic Product in the early hours at 02:00. With China normally a focal gauge of economic growth, these numbers could dictate investor sentiment and the next direction for global indices such as Wall Street, UK 100 and the Germany 30.

EURCAD
EURCAD seems to be the pair with the highest impact data out midweek. On Wednesday morning, the Euro could be affected by German import/export data and trade balance at 07:00, closely followed by Eurozone unemployment rate figures at 10:00. As afternoon trading gets underway, we see the latest interest rate decision from the Bank of Canada at 15:00, accompanied by a rate statement.

GBPUSD
GBPUSD could be the focal point on the final trading day of the week. In the face of a potential global economic slowdown, gross domestic product numbers from the UK at 09:30 (the world’s 5th largest economy) could provide volatility ahead of US Consumer Price Index data out in the afternoon. Inflation is key for the pace at which the Federal Reserve will be hiking rates in 2019. Generally speaking, a high reading could be seen as positive (or bullish) for the USD, while a low reading could be seen as negative (or bearish).

Brent Crude
Brent Crude also began 2019 with a choppy trading week. Concerns remained about rising crude production and weakening global economic growth that could hurt demand for oil. Crude futures ended 2018 down for the first year since 2015. EIA Crude Oil Stocks Change will be important to watch on Wednesday at 15:30 to see if there has been a build or drawdown in oil inventories.

Although macro-economic data is likely to be the main driver for markets, it’s worth remembering that any developments or progress surrounding the US and China trade war and Brexit negotiations between the UK Government and the European Union will be important to monitor for further moves in global indices and relevant currency pairings.

ECONOMIC CALENDAR (all times are GMT)

Monday, 7th January
00:30 JPY Markit Services PMI
07:00 GER Retail Sales
07:00 GER Factory Orders
09:30 EUR Sentix Investor Confidence
10:00 EUR Retail Sales
15:00 USD ISM Non-Manufacturing PMI
15:00 USD Factory Orders
15:00 CAD Ivey Purchasing Managers Index

Tuesday, 8th January
00:30 AUD Trade Balance
00:30 AUD Imports/Exports
05:00 JPY Consumer Confidence Index
07:00 GER Industrial Production
07:45 CHF Unemployment Rate
08:00 GBP Halifax House Prices
10:00 EUR Services Sentiment
10:00 EUR Industrial Confidence
10:00 EUR Business Climate
13:30 USD Trade Balance
13:30 CAD International Merchandise Trade
20:00 USD Consumer Credit Change

Wednesday, 9th January
00:30 AUD Building Permits
01:30 CNY Consumer Price Index
07:00 GER Imports/Exports
07:00 GER Trade Balance
08:15 CHF Consumer Price Index
10:00 EUR Unemployment Rate
13:15 CAD Housing Starts
13:55 USD Redbook Index
15:00 CAD BoC Rate Statement
15:00 CAD BoC Interest Rate Decision

Thursday, 10th January
01:30 CNY Producer Price Index
02:00 CNY Gross Domestic Product
05:00 JPY Leading Economic Index
05:00 JPY Coincident Index
13:30 USD Initial Jobless Claims
13:30 USD Continuing Jobless Claims
13:30 CAD New Housing Price Index
15:00 USD New Home Sales
21:30 USD API Weekly Crude Oil Stock
23:30 JPY Overall Household Spending

Friday, 11th January
00:30 AUD Retail Sales
09:30 GBP Manufacturing Production
09:30 GBP Industrial Production
09:30 GBP Total Trade Balance
09:30 GBP Gross Domestic Product
10:00 EUR ZEW Survey – Economic Sentiment
13:30 USD Consumer Price Index
18:00 USD Baker Hughes US Oil Rig Count
19:00 USD Monthly Budget Statement
  
CORPORATE CALENDARTuesday, 8th January
Morrison (Wm) Supermarkets PLC – Trading Statement

Wednesday, 9th January
Sainsbury (J) PLC – Trading Statement
Taylor Wimpy PLC – Trading Statement

Thursday, 10th January
Card Factory PLC – Trading Statement
Marks & Spencer Group PLC – Trading Statement
Tesco PLC – Trading Statement

Friday, 11th January
AO World PLC – Trading Statement

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