Week Ahead: Economic Indicators (US)
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Week Ahead: Economic Indicators (US)

For the January 20th week, here is a list of the major economic indicators released during the US Session.

Tuesday 21st January


08:30 ET
Canadian CPI for December
The Consumer Price Index (CPI) is a key measure of inflation that tracks the average change in prices paid by consumers for a basket of goods and services over time. It reflects the cost of living and is used to assess price stability in the economy.
CPI measures the price changes in categories like housing, food, transportation, medical care, and energy.
Headline CPI: Includes all items in the basket, including food and energy.
Core CPI: Excludes volatile food and energy prices to give a clearer view of underlying inflation trends.
Rising CPI indicates inflation, which erodes purchasing power, while a decline suggests deflation, which may signal economic weakness.
Policymakers use CPI to guide monetary policy decisions.
CPI is one of the most closely watched economic indicators.
What to Expect
If CPI comes in higher than expected, we would expect to see weakness in Canadian stocks, and strength in the Canadian dollar and government bond yields, as this would cause markets to pull back further on bets for further interest rate cuts, as rates may need to stay higher for longer in this environment to make sure inflation is coming sustainably down to the target.
If CPI came in lower than expected, we would expect strength in Canadian stocks, and weakness in the Canadian dollar and government bond yields, as this would indicate that inflation is continuing to come down to the target, which could increase the likelihood that the BoC can move forward with further interest rate cuts.


Thursday 23rd January
08:30 ET
US Initial Jobless & Continuing Claims
The US Weekly Initial & Continued Jobless Claims report tracks unemployment insurance claims to gauge the health of the job market. Initial claims measure the number of people filing for unemployment benefits for the first time, indicating new job losses.
Continued claims reflect the number of individuals who remain unemployed and are still receiving benefits after their initial filing.
Together, these metrics provide timely insights into labor market conditions and potential economic shifts.
What to Expect
With employment in focus as one of the Fed’s dual mandates, this report has been garnering market attention.
A higher jobless claims number, indicating higher unemployment, would be likely to cause weakness across the US assets (dollar, stocks, and yields), as it feeds into the narrative of a hard landing/broader economic slowdown for the US economy as we come out of the tightening cycle.
A lower jobless claims number, indicating lower unemployment, would be likely to cause strength across the US assets, as it reassures the markets that the US economy may be able to exit the tightening cycle and enter the easing cycle without a recession/broader economic slowdown.

10:30 ET
Weekly EIA Crude Oil Inventories
The US Weekly EIA Crude Oil Inventories report, released by the Energy Information Administration, measures the weekly change in the amount of crude oil held in US commercial storage facilities.
It’s a key indicator for energy markets, as it reflects the balance between oil supply and demand.
What to Expect
An increase in inventories suggests lower demand or higher production, often putting downward pressure on oil prices, while a decrease can indicate higher demand or reduced production, typically pushing prices up.


Friday 24th January
09:45 ET
US S&P Manufacturing & Services PMI
The US S&P Manufacturing & Services PMI are monthly economic indicators compiled by S&P Global that measure the activity levels in the manufacturing and services sectors, respectively.
As diffusion indices, a reading above 50 indicates expansion, while below 50 signals contraction.
US S&P Manufacturing PMI: Assesses the performance of the manufacturing sector by surveying purchasing managers about new orders, production, employment, supplier delivery times, and inventory levels.
US S&P Services PMI: Evaluates the services sector by surveying purchasing managers on factors like new business, employment, input prices, and business expectations.
What to Expect
Higher than expected PMIs would increase the chances for a soft landing, especially if the employment breakdown in the report is positive, as this indicates there is still enough demand to feed into corporate profits and overall US growth, which would be likely to cause strength in US stocks and the dollar.
The opposite is likely true if it were to come in lower than expected.

10:00 ET
University Michigan Sentiment
The University of Michigan Survey measures consumer sentiment and is released monthly. It assesses how consumers feel about current and future economic conditions, including personal finances, business climate, and overall economic prospects.
The survey has 3 main components:
Current Conditions Index: Gauges consumers’ views on the present economic situation.
Expectations Index: Reflects their outlook on the economy over the next six months.
It is a key indicator of consumer confidence, which can influence spending behavior and, consequently, economic growth. Markets and policymakers closely monitor it for insights into consumer trends.
Inflation Expectations: Gives insight into the survey respondents’ outlook for inflation on a 1-year and a 5-10-year-ahead basis.
What to Expect
If the headline Sentiment read comes in higher than expected, this underscores a resilient consumer and reduces the chances of an economic slowdown. This would be likely to cause strength across the US assets (dollar, stocks, and bonds)
If it comes in lower than expected, we would expect the opposite reaction.
However, there is also the inflation expectations.
If these come in higher than expected, we would expect weakness in US stocks and strength in the dollar and government bonds, as higher inflation could cause the markets to pull back on bets of rate cuts from the Fed.
If the inflation expectations come in lower than expected, we would expect strength in US stocks and weakness in the dollar and government bond yields, as traders solidify/increase their bets on rate cuts from the Fed.

US Existing Home Sales
US Existing Home Sales is a monthly report released by the National Association of Realtors (NAR) that measures the number of previously owned homes sold during the month.
This includes single-family homes, townhouses, condominiums, and co-ops.
The report provides insights into the health of the housing market, consumer confidence, and overall economic conditions.
An increase in existing home sales indicates strong demand and economic growth, while a decrease may signal a slowdown in the housing market or broader economy. It is a key indicator of real estate trends in the US economy.
What to Expect
This release is unlikely to cause a market reaction based on the prior months data.
Having said that, higher-than-expected home sales would underline strong demand for homes from US consumers, which would help alleviate fears of an economic slowdown.
This would be likely to cause strength across US asset classes (stocks, bonds, and the dollar)
If it comes out lower than expected, the opposite could be true.