7 to 13 January: The Powell put and trade talks improved the markets’ risk appetite

The principal worry I would have is really global growth,” said Fed Chair Jerome Powell. The Fed Chair added that the FOMC will be “patient” and “flexible” when it comes to the degree and pace of monetary tightening. Although no tangible pieces of information were released after the talks between the US and China were concluded last week, it was just enough for markets that the two countries released coordinated statements that talks were productive and may continue very soon. The combination of these two factors improved global market sentiment and strengthened the appetite for risk. Should the macroeconomic data from the US and China be convincingly solid this week, upbeat investor sentiment might just be sustained for more than just a couple of days.

Financial markets will need to digest a whole bunch of macroeconomic data coming from the US, again, such as PPI inflation, new home sales, factory orders, retail sales, industrial production and the sentiment index produced by the University of Michigan. Meanwhile, on the other side of the Atlantic, both the UK and the Eurozone are going to reveal consumer price inflation figures from December.

Within the emerging Asian space, markets are going to focus mainly on Chinese foreign trade data, Indian consumer price inflation and the rate setting meeting in Indonesia. In Latin America, various high-frequency macroeconomic indicators will be released, such as the November economic activity indicators from Peru and Brazil. African markets face a light economic diary this week, as no major released are scheduled apart from monetary policy decision in South Africa, Nigerian consumer price inflation and Egyptian foreign trade statistics.

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