Week Ahead Watch List

The biggest news, if it comes out as expected, looks to be tame results for Wednesday's CPI from the US which would have Federal Reserve officials talking taper. In contrast, however, inflation data from China, where the CPI and PPI come out on Friday, aren't expected to be soft at all, especially producer prices where a rise to double-digits is the expectation. Japan data will include producer prices on Tuesday, with increasing heat also the call, followed by machinery orders on Wednesday which are expected to show strong improvement. Outside of machinery orders, the week's data are expected to come out mostly soft, whether Chinese merchandise trade on Wednesday, Eurozone industrial production also on Wednesday, or the Australian labour force survey on Thursday where a very weak report would be a reminder that Covid effects can still be severe. Sentiment data will include Germany's ZEW survey on Tuesday, expected to show less optimism, and the US consumer sentiment index on Friday which is expected to show continued pessimism. Friday will also see US retail sales which are expected to be pulled down by autos. Central bank news will include an announcement from the Bank of Korea, which raised rates at its last meeting, and FOMC minutes on Wednesday which will add detail to the taper outlook.