As we enter the second trading week of January, global markets remain attentive to a series of important economic indicators and corporate earnings that may set the tone for the year ahead. Inflation, GDP readings, and key earnings reports from financial and tech giants will dominate the economic calendar.

Here's what to watch for each day: 

Monday, January 13th: U.S. Federal Budget Balance

The U.S. Federal Budget Balance, which measures the monthly difference between government income and expenditure, will be released. Historically, the U.S. has run budget deficits, which can lead to increased borrowing. If deficits widen further, the Federal Reserve (FED) may eventually face pressure to raise interest rates to attract more investors, a move with long-term implications for both the economy and markets.

Tuesday, January 14th: Producer Inflation in the US and Japan Money Supply

Producer Price Index (PPI) - U.S.

The Producer Price Index (PPI) offers insight into inflation at the production level, a precursor to shifts in consumer inflation (CPI). If producers face rising costs, these increases often filter down to consumers, which may end up generating overall inflation. Monitoring this report is critical as it provides an early signal of inflationary pressures in the U.S. economy and a glimpse at the FED’s next steps in the monetary policy

Japan M3 Money Supply

This indicator measures the total domestic currency in circulation and deposits in Japan. A rise in money supply can hint at potential currency devaluation in the medium term, whereas tighter figures may strengthen the Japanese yen against its global counterparts.

Wednesday, January 15th: Inflation in the US and UK. Earnings from the financial sector

U.S. Consumer Price Index (CPI)

The CPI will shed light on inflation trends in the U.S. The previous reading of 2.7% exceeded the FED's medium-term target of 2%, indicating sustained price pressures. A higher-than-expected figure could prompt the FED to consider a more aggressive monetary policy stance in 2025, which can affect both the dollar and stocks.

U.K. Consumer Price Index (CPI)

The U.K.'s inflation data will also be in focus. Recent readings have shown an upward trend, with the latest at 2.6%, slightly above the Bank of England's (BOE) target. If inflation continues to rise, the BOE may need to reconsider its recent dovish stance and take measures to support the GBP in the medium term.

Earnings Reports from JPMorgan (JPM), Goldman Sachs (GS), and Citigroup (C)

This Wednesday, the financial sector takes centre stage with earnings reports from three of the industry’s most prominent players. JPMorgan has consistently delivered robust numbers in recent quarters, bolstering investor confidence. Meanwhile, both Goldman Sachs and Citigroup showed negative Net Income Growth in 2023 Earnings, raising questions about what the next Earnings will bring.

Thursday, January 16th: UK and China’s GDP, German Inflation, US Retail Sales and TSM Earnings

U.K. GDP

The U.K.'s GDP growth has been sluggish, hovering around 1% annually and frequently missing forecasts. This presents a dilemma for the BOE in 2025: How will the Central Bank stimulate growth without exacerbating inflation? Will the BOE find the right balance in the medium term?

Germany CPI

The German CPI is due to report inflation in the country. Recent readings have shown a possible rising inflation of around 2.6%, above the European Central Bank's (ECB) target of 2%. With ongoing challenges in the industrial and political spheres, Germany seems to struggle amid the ECB's next steps and how it could significantly impact the eurozone's economic landscape in 2025.

U.S. Core Retail Sales

Retail sales data offers insight into consumer spending, which accounts for two-thirds of U.S. GDP. Strong readings may signal an overheating economy and heightened inflation risks, potentially prompting the FED to raise rates sooner than anticipated. 
 

China GDP

China's economy has been a growth leader, with the last reading at 4.6%. However, Donald Trump's return to the U.S. presidency may introduce new headwinds to China’s production. Potential tariffs on Chinese goods could dampen demand and pose challenges to the country’s growth trajectory in the next few years.

Earnings Report from Taiwan Semiconductor Manufacturing (TSM)

TSM, a key player in the tech sector, reported a sharp decline in Net Income Growth (-17.51%) last quarter. Markets will closely examine whether the company has recovered or if challenges persist.

Friday, January 17th: Eurozone Inflation.

Eurozone Consumer Price Index (CPI)

The eurozone’s CPI previously came in at 2.2%, slightly above the ECB's target. With rising inflation in several member countries, the latest figures may reveal whether inflationary pressures are spreading across the bloc. The question is: If inflation is really rising in Europe, how long will it take until the ECB starts raising interest rates again? 

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