Traders’ Diary: Everything you need to get ready for the week ahead

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australia CPI


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australia CPI


What grabbed the headlines last week?  

Australian unemployment rises

Aussie unemployment rate inched higher from 3.4% to 3.5% in December, further mitigating the case for a steep RBA rate in February.

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The economy shed 14,640 jobs in December, revising the jobless rate up slightly from a 50-year low.

Matt Simpson, senior market analyst at City Index, believes a 25bp hike by the RBA is still on the cards for February.

“It’s unlikely to derail the RBA from another 25bp hike in February, especially with inflation continuing to rise, but the RBA will keep a close eye on employment change and unemployment to see if it is the beginning of a trend,” Simpson said.

 

China’s GDP slows down

China’s economy or GDP grew by just 2.9% in the October – December period, the second slowest pace since the 1970s.

This growth is well shy of the 5.5% pace the government had targeted at the beginning of 2023 before the loosening of its Covid policy caused a spike in cases.

The World Bank and other economists however, are still bullish on China, saying that the country’s GDP growth will quicken to 4.3% this year and 5% the next.

 

The still hot US jobs market

Despite all the Big Tech layoffs, the US jobs market remains hot.

The first-time claims for weekly unemployment benefits in the US dropped by 15,000 to 190,000, the lowest levels since September.

Alphabet (Google) was the latest company to cut jobs worldwide, announcing the layoff of 12,000 jobs worldwide on Friday.

It comes days after Microsoft said it would cut 10,000 jobs.

The still hot jobs market, along with slowing inflation in the US, is sure to complicate the Fed’s rates decision in February.

JPMorgan Chase CEO Jamie Dimon reckons US rates will still have to go up and will top 5% (currently at 4.25%) before the Fed pauses.

“I think there’s a lot of underlying inflation, which won’t go away so quick,” Dimon told the World Economic Forum in Davos.

 

Expert comments from Davos

Speakers at the latest World Economic Forum (WEF) meeting in Davos detailed the world’s long list of problems.

But there was also a sense of optimism as the conference concluded on Friday.

WEF President Børge Brende opened the meeting by saying: “So much is at stake. We really need to find solutions on the wars and conflicts. We also have to ensure that we don’t go into a recession and ten years of low growth as we had in the 1970s.”

Chinese vice-premier Liu He gave attendees a ray of hope, saying that China will bounce back from Covid and return to normal economic growth this year.

“China has passed the infection peak. Members of society have returned to normal,” Liu said about the Covid outbreak in China.

ECB President Christine Lagarde was among those to warn about overly optimistic market expectations, insisting that she would “advise market participants to revise their positions”.

Activist Greta Thunberg blasted the COP28 organisers for appointing the head of UAE’s state-owned oil company to chair the COP28 climate talks later this year.

Meanwhile, cryptocurrency regulation was one of the main topics at WEF following the FTX debacle.

François Villeroy de Galhau, governor of the Central Bank of France, explained that regulation for crypto markets was imperative for avoiding the same kind of damage that FTX had done.

“The question is not whether we have to regulate or not… for sure we have to regulate. Some even say it’s not a question of regulating, is a question of prohibiting,” he said.

 

The Economic Calendar

Monday January 23 – Friday January 27

All sources from Commsec and Investing.com

In Australia, the jobs data on Wednesday will be the main focus for investors.

 

Australia and New Zealand

In Australia, the all-important consumer price index (CPI) will be released on Wednesday.

MONDAY

Commsec state of the States

TUESDAY

Judo Bank purchasing managers’ indexes

NAB business survey; Weekly consumer confidence index

WEDNESDAY

Quarterly CPI

Detailed labour force

NZ CPI

THURSDAY

Australia Day holiday

FRIDAY

Producer price indexes (PPI)

International trade price indexes

NZ business confidence

 

Global

Most Asian financial markets, including China, are closed for the week-long Lunar New Year public holiday.

MONDAY

US Conference Board leading index

EU consumer cofidence

TUESDAY

US S&P Global purchasing managers’ indexes

EU manufacturing PMI

EU services PMI

THURSDAY

US Economic growth

US durable goods orders

US goods trade balance

US wholesale inventories

US new home sales

FRIDAY

US personal income & spending

US PCE core deflator

US pending home sales

 

The ASX IPO calendar for this week

Dates are from the ASX, and they could change at short or without notice.

HIGH-TECH METALS (ASX:HTM)

Listing: 23 January

IPO: $5.5m at $0.20

On listing, the company will acquire the Werner Lake Cobalt Project in northwestern Ontario, within the Kenora Mining District.

Initial plans include reviewing the existing exploration and geological data, drill targets not previously drilled and establish new drill targets at the Project. 

New drill targets will then be established using electromagnetic techniques to consider targets outside of the existing orebody, after which an RC and/or diamond drilling program will be conducted.

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