On Tuesday, the U.S. will release CB consumer confidence and the Richmond manufacturing index. Wednesday's focus will be on Australia's inflation data, while Japan will report the BoJ Core CPI y/y. In the U.S., new home sales data will be released.
Throughout the week, several FOMC members are expected to deliver remarks.
Analysts at Westpac noted that January typically sees seasonal price declines, particularly in clothing, footwear, household goods, and holiday travel, which could contribute approximately -0.6 percentage points to the monthly figure. Additionally, ongoing Commonwealth government rebates may further dampen electricity prices.
In the U.S., the consensus for new home sales data is 677K vs. 698K prior. A decline is expected in this week's report.
The South remains a key region to watch, as recent hurricanes have negatively impacted sales but activity is expected to normalize. That said, elevated new home inventories and improving supply in the existing home market could limit any significant upward momentum. Overall, a slow and gradual recovery in home sales is expected throughout 2025.
The recent decline in durable goods orders can largely be attributed to fluctuations in aircraft orders. Analysts at Wells Fargo suggest that this likely reflects Boeing's weaker net orders, which were impacted by strike-related disruptions.
The consensus for Tokyo's core CPI y/y in Japan is a decline from 2.5% to 2.3%.
The Bank of Japan will closely monitor whether recent spikes in food prices, especially for rice, are being passed on to consumers. Overall, Japan's economy shows signs of gradual recovery, as indicated by recent economic data.
In Canada, the consensus for GDP m/m is 0.3%, compared to the previous -0.2%. Quarterly GDP is forecasted to be 1.5% on an annualized basis.
The labor market remains resilient, and inflation has surprised to the upside, suggesting that the BoC is likely to keep rates on hold at its next meeting in March. Analysts caution that risks from potential tariff hikes remain high, which could dampen growth and influence the rate path later in 2025.
This week's report will place special attention on the core PCE price index to assess any signs of inflation persistence. Analysts at Wells Fargo anticipate a bigger 0.6% rise in personal income, driven in part by cost-of-living adjustments and wage growth. However, they expect personal spending to show only a modest 0.1% increase, as the sharp 0.9% drop in retail sales indicates a slowdown in goods consumption.
This trend suggests a potential moderation in demand, but with resilient income growth, spending could regain momentum in the coming months.
This article was written by Gina Constantin at www.forexlive.com. Read More Details
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