Good mix of important economic data releases, with the highlights coming at the end of the week for the US and UK

The US is expecting important inflation data out on Friday, along with the Michigan Consumer Sentiment Index, which could have a large impact on how the markets swing going into next weekend.

US

Tuesday is the first day that the US will release important data, as both the Goods and Services Trade Balance, and Nonfarm Productivity (Q3) is announced.

The Trade Balance, expected to improve from -$80.9b to -$66.8b, has historically been in the negative for the US, but as the number is getting closer to 0, it could be indicating a stronger demand for exports, positively impacting the USD and economy.

Nonfarm Productivity will be an important figure to determine the overall health of business in the US, currently at -5%, it is not expected to move that much at -4.9%.

On Thursday, Initial Jobless claims is expected to rise from 222k to 228k, showing a slight weakening of the US labour market, although this figure is still much lower than it has been throughout most the year.

Friday will most likely be the biggest day for data releases, as both CPI figures and the Michigan Consumer sentiment index are set out.

Investors will likely be hoping for a lower-than-expected figure, to reduce the risk of an inevitable rise in interest rates happening this year.

At the moment the general consensus is that it will fall from 0.9% to 0.6%, although last month forecast a similar result and the figure was higher than predicted.

The Michigan sentiment is expected to rise slightly to 68, as consumers carry on their positive spending habits after the pandemic.

UK

Relatively quite start to the week for the UK, with the highlights being the BoE’s Broadbent, speaking at Leeds University.

The BoE Deputy Governor is due to talk about the outlook for growth, inflation, and monetary policy, which investors will be watching closely for clues about future changes to these policies.

Like the US, Friday should be the most important day, as Industrial/Manufacturing production figures are released.

The prediction is for the data to be positive at 0.1%, as last month it was -0.4%. However, on multiple occasions recently, the prediction has always been positive, but the actual figure has rarely followed this.

Rest of the World

The EU is also expecting Q3 GDP data on Tuesday, which is predicted to drop to 2%, most likely because of the recent increased restrictions across the continent.

Close to midnight on the Tuesday, Japan will also release Q3 GDP figures, expected to change from negative to positive at 0.4%.