Weekly Outlook: 2017, January 08 - January 15

Weekly Outlook: 2017, January 08 - January 15

The US dollar wobbled in the wake of 2017, torn between good and bad news. US Retail sales, consumer sentiment and PPI stand out. These are the highlights for this week.

The US monthly employment report showed a lower than expected job growth in December but wages registered a 2.9% annualized gain. The economy added 156,000 positions while expected to increase 175,000. The unemployment rate edged to 4.7% from 4.6%. However, wage growth was the most significant factor in December’s report as average hourly wages jumped 10 cents to $26, the highest gain since 2009, indicating the US labor market has fully recovered. The final report of 2016 also comes amidst a presidential transition period. Donald Trump has promised aggressive fiscal measures including tax cuts and higher domestic spending to boost economic growth beyond the mild expansion witnessed so far.

1. US Crude Oil Inventories: Wednesday, 15:30. Oil prices increased as Saudi Arabia consented to OPEC’s plea to reduce output after prices fell on Us data.
2. US Unemployment Claims: Thursday, 13:30. The four-week moving average of claims declined 5,750 reaching 256,750. The number of weekly unemployment claims have remained below the 300,000 threshold associated with a healthy labor market, for 96 consecutive weeks. Economists expected a higher reading of 262,000.
3. US Retail sales: Friday, 13:30. Consumer spending strengthened recently amid continued solid job gains as well as rising wages, raising consumer’s optimism about their finances. Meanwhile, core sales, excluding automobiles and service stations increased 0.2%, while anticipated to rise 0.4%.
4. US PPI: Friday, 13:30. Producer prices have rebounded from last year’s plunge in oil prices and are expected to offset deflationary effects from the dollar’s renewed strength.
5. US UoM Consumer Sentiment: Friday, 15:00. Consumers expressed high hopes from the new economic policies planned by the newly elected president.

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