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UK wage growth picks up further

Chris Scicluna
Emily Nicol
  • Despite exceeding expectations, Chinese GDP stalled at the end of 2022 amid ongoing Covid-disruption
  • Japanese tertiary activity slips back in November, despite a boost from the government’s travel incentive scheme
  • ECB Chief Economist flags need for further tightening, but ready to pivot if the inflation outlook shifts
  • US Empire Manufacturing survey expected to report a softer pace of contraction in January

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All eyes on the BoJ's monetary policy annoucement

Chris Scicluna
Emily Nicol
  • All eyes on the BoJ’s monetary policy announcement on Wednesday; given ongoing JGB market dysfunction, a further adjustment to the YCC framework cannot be ruled out
  • In the euro area, Thursday’s release of the ECB account from the December meeting will be watched closely
  • UK labour market and CPI data a key focus for the BoE this week, with headline inflation likely to have fallen sharply

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UK GDP beat expectations in November

Chris Scicluna
Emily Nicol
  • The BoJ continued to fight against the market pressures against the current target, with extra fixed-rate purchase operations conducted today 
  • Chinese exports fell for a third consecutive month in December amid a steep drop in shipments to Germany
  • Euro area industrial production likely rebounded in November, albeit failing to reverse the drop the prior month to remain on track for a fall in Q4

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BoJ YCC framework remains under pressure

Chris Scicluna
Emily Nicol
  • BoJ Regional Economic Report saw most regions report a moderate improvement in economic conditions over the past three months
  • Chinese inflation ticked higher in December but PPI surprised on the downside and CPI remained very subdued
  • ECB consumer expectations survey results to be watched closely today for any signs of de-anchoring of household inflation expectations

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Tokyo CPI inflation jumps to a four-decade high

Chris Scicluna
Emily Nicol
  • BRC survey suggested a firmer festive period for UK retailers; REC survey suggests that UK labour market tightness continues to ease
  • French manufacturing output rebounded more than expected in November

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