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The most important economic events expected this week 1 to 5 Feb 2021
Coronavirus continues to impede economic growth in major economies. The Eurozone is struggling, while in the US, Fed pessimism and massive stimulus plans could derail the path for the US dollar. The main releases for this week are Eurozone GDP and US employment.
German GDP in the fourth quarter slowed to just 0.1%, down from 8.2%. French GDP for the fourth quarter came in at -1.3%, its fourth decline in five quarters. There was good news on the inflation front, with the CPI jumping to 0.8% in January, up from 0.5% and an 11-month high.
Strong UK employment numbers gave the British Pound a slight boost early last week. Wage growth jumped to 3.6%, up sharply from 2.7%. Unemployment lists rose by only 7,000, well below the estimate of 47.5K. The unemployment rate rose from 0.9% to 5.0%, the highest level since March 2016.
Canadian GDP in November was unexpectedly strong as it posted a 0.7% gain from 0.4%. This reading easily exceeded expectations of 0.4%.
The Federal Reserve policy meeting repeated a dovish stance and Fed Chairman Powell poured cold water amid speculation that the Fed will moderate its quantitative easing program in the near future. First quarter GDP posted a decent gain of 4.0%, close to estimates of 4.2%.
US ISM Manufacturing PMI: Monday. Manufacturing continues to publish readings well in expansionary territory and the estimate for January stands at 60.0.
French Consumer Price Index: Tuesday. Inflation in the euro zone's second largest economy posted a second consecutive gain of 0.2% in December. However, the forecast for January stands at -0.3%.
Eurozone GDP: Tuesday. Markets are preparing for the near end of the eurozone growth year. The first estimate of the fourth quarter GDP stands at -1.4%, as the resurgence of Covid-19 cripples the economy.
Eurozone Inflation Report: Wednesday. Inflation remains weak in the Eurozone, but better news is expected for January, and the headline reading is expected to improve to 0.4%, while the core reading is expected to rise to 0.7%, the highest in 6 months.
US ISM Services PMI: Wednesday. The service sector is showing no ill effects from Covid, with recent jobs being well above the 50 level, indicating expansion. The forecast for January is 56.7.
Bank of England rate decision: Thursday. The BoE is expected to remain conservative and keep interest rates at 0.10%. Investors will be interested in the MPC's quarterly report, which will provide an insight into the health of the UK economy.
Canadian Employment Report: Friday. The Canadian economy fell from 62.6 thousand in November, its first decline since April. The unemployment rate rose to 8.6% from 8.5%. We are now waiting for the December numbers.
US Employment Report: Friday. Wage growth is expected to slow from 0.8% to 0.3% in January. The economy shed 140,000 jobs in December, but is expected to head into positive territory, with an estimate of 55,000 jobs. No change is expected in the unemployment rate of 6.7%.
