By Dow Jones Newswires staff
Below are the most important global events likely to affect FX and bond markets in the week starting Jan. 12.
U.S. inflation data for December will likely be the highlight of the week as investors continue to gauge the likely timing and extent of further interest-rate cuts by the Federal Reserve.
In Europe, gross domestic product figures from Germany and the U.K. will be watched, while in Asia markets will focus on China's trade data, with the country expected to have posted robust export growth for December.
U.S.
Inflation data for December are due on Tuesday.
This will be a key piece of data for Federal Reserve policymakers, although the figures are unlikely to change expectations that U.S. interest rates will likely stay steady in coming months before falling further later this year.
The figures come after U.S. jobs data showed a bigger-than-expected fall in the unemployment rate, dimming concerns about a potential sharp deterioration in the jobs market. Meanwhile, inflation remains well above the Fed's 2.0% target. Annual inflation unexpectedly dropped sharply to 2.7% in November, although many analysts expect that the number could have been distorted due to the U.S. government shutdown.
ING economists said the data are unlikely to alter expectations that the Fed will cut interest rates at least twice in 2026, especially as Fed Chair Powell has suggested that the impact of tariffs on inflation will peak in the first quarter and then subside.
"We believe falling energy prices, slowing housing rents, and weakening wage growth will allow the annual inflation rate to head back towards 2% around the turn of the year," they said in a note.
Producer prices data for November on Wednesday will give an indication of pipeline inflationary pressures, while November retail sales figures on the same day will tell investors how consumer spending is holding up.
Other data include December existing home sales on Wednesday, weekly jobless claims numbers on Thursday and industrial production for December on Friday.
The U.S. Treasury will auction $58 billion in three- and $39 billion in 10-year notes on Monday and $22 billion in 30-year bonds on Tuesday.
Eurozone
The economic data calendar dries out in the coming week, leaving Germany's first provisional annual gross domestic product calculation on Thursday as the highlight.
Eurozone industrial production and foreign trade data are due on Thursday.
Also on Thursday, final French and Spanish inflation for December are scheduled alongside Italian industrial production. Final Germany and Italian inflation for December are due on Friday along with Spanish industrial orders and turnover data.
Government bond issuance remains heavy as further sovereigns kick off their annual funding programs. Government bond auctions are scheduled from the Netherlands, Austria, Italy and Germany on Tuesday; from Germany again on Wednesday and from Spain on Thursday. Syndicated issues are also likely.
U.K.
U.K. gross domestic product data for November are due on Thursday as official data releases start to ramp up as 2026 gets underway.
The figures should show an improvement in the economy during November as manufacturing rebounds following the cyberattack on Jaguar Land Rover, alongside some recovery in consumer spending, Investec economist Lottie Gosling said in a note.
"We expect [the data] to show an expansion of +0.2% on the month, which if correct would be the fastest monthly expansion since June," she said.
Industrial output figures for November are released at the same time. The RICS house price survey for December is also released on Thursday and will give an indication of whether demand for house purchases picked up after the Nov. 26 budget, Gosling said.
Bond auctions include a sale of September 2035 index-linked gilts on Tuesday and one of October 2035 gilts on Wednesday.
Scandinavia
Swedish inflation figures for December are released on Thursday. Sweden will also hold a bond auction on Wednesday.
Switzerland
A Swiss bond auction is scheduled for Wednesday.
Poland
Poland's central bank announces an interest-rate decision Wednesday.
The key policy rate is expected to be left on hold at 4.0% given uncertainties over the inflation outlook, although there is a potential for rates to be cut, ING economist Adam Antoniak said in a note. ING sees the odds of a 25 basis-point rate cut at this meeting at around 35%.
"With inflation falling below the NBP target in December 2025…the room for further policy easing is clearly still open, especially keeping in mind that the main policy rate is currently at 4.00%," Antoniak said.
Japan
Japan faces a light data calendar, though markets remain alert to new export restrictions from China following Prime Minister Sanae Takaichi's comments on Taiwan. Beijing's dual-use export ban is likely "more bark than bite" and largely symbolic, Capital Economics economist Marcel Thieliant said, noting that China will restrict sales only to Japan's military, which likely accounts for little demand.
Japan is set to release November balance-of-payments data on Tuesday, with Citi Research expecting a surplus of 3.38 trillion yen before seasonal adjustment, supported by stronger exports and a rebound in primary income.
The Bank of Japan is scheduled to conduct outright purchases across several segments of the government bond market on Thursday, a move expected to support bonds.
Markets have currently priced in the BOJ's next rate increase for July, though MUFG Bank sees a meaningful risk of an earlier move, potentially in the second quarter as wage negotiations and updated forecasts come into clearer view.
The Ministry of Finance will also auction about 2.5 trillion yen of five-year notes on Wednesday, where demand could be tested amid concerns over yen weakness and further BOJ tightening.
Australia
The week ahead in the Australian bond market will be dominated by consumer-related data. Figures on job advertisements and job vacancies for November will be closely scrutinized for any signs of emerging weakness in the labor market.
A key concern for the Reserve Bank of Australia remains persistently high inflation. However, if policymakers respond to the problem with an interest-rate increase in February, as many economists expect, the central bank risks triggering a rise in unemployment.
The release of the November household spending indicator later in the week will also draw close attention, amid growing evidence of a broad-based economic recovery partly driven by consumer demand.
If household spending shows a sharp pre-Christmas increase, the RBA might be more inclined to begin raising rates, particularly with both headline and core inflation still elevated.
China
Markets will be watching China's latest trade data due Wednesday.
Economists polled by The Wall Street Journal expect export growth in December to slow to 2.6% from 5.9% in November, while import growth is forecast to ease to 0.7% from 1.9%.
China's trade surplus is projected to fall to $109.6 billion in December from $111.7 billion in November.
Deutsche Bank economists attribute the slowdown in export growth to base effects, while shipping activity has also moderated since mid-December due to the holiday season. Citi economists, however, noted that overall cargo throughput still rose about 1.9% on year last month, despite slower U.S.-China trade, with strong semiconductor demand continuing to support imports.
Beijing is also set to release money-supply and credit data. ANZ economists expect M2 money supply growth to stay unchanged at 8.0% on year, while M1 is forecast to contract 3.6%. Credit growth is likely to stay weak due to local government debt swaps, with both aggregate financing and yuan-denominated loans appearing to have passed the peak of the current lending cycle, they added.
Investors will also watch China's foreign direct investment figures.
India
India is set to release inflation data on Monday and Wednesday.
ANZ expects headline consumer-price inflation for December to rise to 1.8% on year, driven by easing deflation in food and beverage prices and firmer core inflation.
"Volatility in food prices can be a surprising element," ANZ said, adding that the Reserve Bank of India is unlikely to cut rates soon given that economic growth remains resilient.
Favorable base effects are fading, and the impact of elevated gold and silver prices is becoming more pronounced, though overall price pressures remain contained, ING economists said. Nomura economists said inflation has likely bottomed out, and should tick higher in December.
Trade data will also be closely watched for signs of widening deficit or shifts in trade flows amid tariff tensions and unresolved trade talks with the U.S.
The figures are expected to show a continued but modest improvement in the trade deficit, driven mainly by lower crude oil prices and incremental export gains, partly offset by higher gold imports, ING said.
South Korea
The Bank of Korea is expected to hold its policy rate steady at a rate-setting meeting on Thursday. Many market analysts see the central bank keeping its policy rate unchanged at 2.50% through 2026.
Citigroup economist Jin-Wook Kim said monetary policy is shifting toward a prolonged rate-hold stance, even as the central bank formally retains the option to cut rates. He expects the bank could remove a potential rate cut from its policy guidance as early as April.
The easing cycle might be over, supported by an improving growth outlook and rising inflation, Nomura analyst Jeong Woo Park said. Park forecasts South Korea's economy to expand 2.3% in 2026, faster than the consensus estimate of 1.9%, supported by a recovery in construction activity, resilient consumption and solid semiconductor-driven exports. He expects inflation to average 2.1% this year, slightly above the central bank's 2% target.
Malaysia
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01-11-26 1914ET
