Macroeconomics: The Day Ahead – 21 January 2021

Good Morning: The Long & the Short of it and The Bigger Picture

Written by Marc Ostwald, ADMISI’s Global Strategist & Chief Economist

  • Busier day for data, but central banks to the fore; digesting Japan & Sth Korea Trade, Oz Unemployment, French Business Confidence, awaiting UK CBI Industrial Trends, US Claims, Philly Fed & Housing Starts; BoJ, Norges Bank, ECB and SARB rate decisions; France, Spain, UK & US bond auctions; real economy dominates US corporate earnings run
  • BoJ holds, modest GDP forecast upgrade a case of justifying no change, despite continued warning on downside risks
  • ECB: no change expected; questions to focus on full PEPP usage; spurious de Guindos ‘yield curve control proposal’; promoting EUR vs. verbal protests on EUR strength; latest lending survey
  • US jobless claims seen dipping but very high, seasonal adjustment playing a role: Philly Fed seen little change, orders and prices in focus; Housing Starts to remain robust, some risk of setback
  • Weekly Investing Channel video: “Fed backstop keeps US real yields in check despite debt concerns”. Click here to watch.


The day’s data run is not without highlights, with Japanese, Korea and Philippines Trade, Australian labour data and French Business Confidence to digest ahead of UK CBI Industrial Trends, US weekly jobless claims, Philly Fed Manufacturing survey and Housing Starts. But the day belongs to central banks, via way of BoJ, ECB, Norges Bank, South Africa’s SARB and Ukraine’s NBU policy meetings, even if all are expected to leave policy settings unchanged. US corporate earnings shift away from the financial sector with Intel, IBM, Fuel Cell Energy and Union Pacific among the highlights, while there are multi tranche govt bond auctions in France and Spain, along with UK 3 yr and US 10 yr. The BoJ left rates and other policy measures unchanged, and very modestly upgraded its GDP forecast for 2021, while warning of continued downside risks to the outlook, which suggests that the forecast upgrade was primarily a way of justifying no change in policy, rather than a genuine expression of some optimism.


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