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Week Ahead – Inflation remains key




This week’s main event will be when a little inflation report comes out. The December US CPI report is expected to confirm that there are no signs of inflation.  The year-overyear CPI reading will likely fall from 7.1% to 6.6% while the monthly reading should remain flat. The University of Michigan sentiment report will show a slight improvement at the end of this week and could indicate that inflation expectations are continuing to fall.  

Friday is the start of earnings season. Everyone will be paying close attention to the statements made by the banks about the economy.  If JPMorgan, Citigroup and Wells Fargo become pessimistic about consumers, it could give rise to recession calls.  

The US will dominate headlines this weekend as Republicans seek to elect a Speaker.  The House can’t function without a speaker and this impasse has implications for national security-related briefings and oversight.


It was a quiet week with only a handful of data points due. The most notable being the eurozone unemployment report. After the December inflation data showed that price growth was slowing, but core prices were rising, all eyes are now on the ECB meeting in early January.

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