We hope you’re as excited about the week to come as we are! …as some of the world’s biggest economies get ready to release key economic indicators. The UK employment market is predicted by analysts to continue tightening, as inflationary pressures are predicted to increase. This lack of inflationary pressure might cause the Bank of England (BoE) to hold its interest rates where they are for longer. At the same time, up in Canada, Prime Minister Carney is doing everything possible to improve trade ties with China. In the U.S., President Trump is about to see to it that credit card interest rates are capped at 10%. As these developments take place, investors and traders will be looking intently at every economic indicator such as GDP rates and inflation figures.
UK Economic Indicators and Inflation Pressure
On Tuesday, the UK will release its labour market statistics for November. Our analysts see a net tightening trend in the British labor market, which might strengthen the British pound. Whether the boom for real, we hope so, indeed this would be most welcome sign of better things economically in the UK.
“In the coming week, we highlight the release of UK’s employment data and CPI rates as possible market movers for the GBP. Should the rates show a tighter UK employment market and a persistence of inflation, we may see the pound getting some support.” – Analyst’s opinion (GBP)
Next up, on Wednesday, we’ll see December CPI rates come out. Forecasters are already anticipating an acceleration in these rates, which would be a sign of reemerging inflationary pressures. The BoE is undoubtedly watching these developments with great interest. It could choose to maintain its pause on interest rate increases for an extended period.
The collision of a tightening labor market and rising inflation may set in motion seismic changes in monetary policy. Tax observers are looking to see how these and other trends will impact both the U.S. and global tax markets.
Impacts on Global Economies
Back on the other side of the Atlantic, over in the U.S. we’ll get the GDP rate for Q3 on Thursday. This number will be very important for economic calculations in the future. All else being equal, analysts reckon a faster-than-expected print for GDP would provide a boost to the U.S. buck.
“Overall in the coming week, we highlight the release of final US GDP rate for Q3 25 and the PCE rates for November as possible market movers for the USD. A possible acceleration of the rates could provide some support for the USD as it could enhance the Fed’s intentions to keep rates unchanged for longer.” – Analyst’s opinion (USD)
The latest Personal Consumption Expenditures (PCE) rates—often the Fed’s preferred measure of inflation—will be released for November this week. These figures are at the heart of how we measure levels of inflation. They give insights into consumers’ spending habits, which together are critically important for gauging economic health.
Across Europe, Germany’s ZEW indicators for January will be released, along with preliminary PMI figures for France, Germany, and the Euro Zone. Analysts are praying that these leading indicators will turn and show an upturn in economic activity.
“In the coming week, we highlight the release of Euro Zone’s preliminary PMI figures for January, and should the release show improvement of economic activity we may see the common currency getting some support.” – Analyst’s opinion (EUR)
And the ECB’s own Vice President, Luis de Guindos, has made no secret of his opposition. He is concerned that persistent geopolitical conflict will suffocate economic growth. This feeling may put even more weight on European markets as they travel through choppy tides.
Canada and Australia’s Economic Outlook
Over in Canada, Prime Minister Carney is mostly concerned with building up those trade relationships with China. This new initiative is especially important right now in light of China’s recently released report showing a surprising jump in industrial output during the month of December.
This turn of events stands to boost the outbound fortunes of Australia’s exports, which continue to enjoy strong demand from China. On Monday, Canada will be publishing their CPI rates for December. Analysts are calling it the biggest thing for markets since Brexit.
“In the coming week, we highlight the release of Canada’s CPI rates as possibly the main event of the week. A possible acceleration of the rates could enhance the market’s expectations for the BoC to remain on hold, thus providing support for the Loonie.” – Analyst’s opinion (CAD)
Australia’s next employment report is another market moving piece of data that’s captured a lot of traders’ attention. A stronger than forecast jobs market would give a more positive context for the Aussie dollar.
“The main market mover for Aussie traders in the coming week may prove to be the release of Australia’s employment market, and data pointing towards a possibly tighter than expected Australian employment market may provide some support for AUD.” – Analyst’s opinion (AUD)