Buckle Up - Inauguration, BoJ, CPIs, PMIs
Trades are currently performing as expected (ES and Gold) we are looking to add a few new positions in the coming 24-48hrs. In the meantime see the below key events for the week ahead
Monday, January 20, 2025
China: People's Bank of China Loan Prime Rate announcement (1-year and 5-year rates).
US: Markets closed for Martin Luther King Jr. Day and Donald Trump will be inaugurated as the 47th U.S. president, marking his second term in office.
Tuesday, January 21, 2025
New Zealand: Q4 2024 Consumer Price Index (CPI).
Key measure of inflation, released at 16:45 NZDT.UK: Labour Market Statistics (November 2024), including unemployment rate and average earnings.
Canada: December 2024 Consumer Price Index (CPI).
Wednesday, January 22, 2025
UK: Public sector finances for December 2024.
Thursday, January 23, 2025
Japan: Bank of Japan (BOJ) Monetary Policy Meeting begins.
Potential changes in monetary policy will be closely analyzed.
Friday, January 24, 2025
Eurozone: HCOB Flash Eurozone PMIs (Manufacturing and Services) for January 2025.
Indicator of economic activity across the region.Japan: Conclusion of the BOJ Monetary Policy Meeting.
US: December 2024 Existing Home Sales data.
The New Zealand and Canadian CPI prints will be closely watched by market participants as a ‘canery in the coal mine’ viewpoint… meaning will it offer a peak of what is to be expected in other G7 economies.
The Bank of Japan is currently priced for a 21 basis point (bps) hike out of the expected 25 bps. The market will be closely watching for the degree of hawkishness in their guidance, as it could significantly impact the yen carry trade, where investors borrow cheap yen, convert to USD, and invest in higher-yielding assets. A tightening of the interest rate differential risks squeezing the profitability of the carry trade, as the yen strengthens and the cost of borrowing rises, potentially triggering unwinding flows and broader disruptions across risk markets.
More to follow regarding new trades…