Geopolitical developments rocking the world politics and markets will most likely remain the driving forces behind price changes in forex and stocks worldwide.
Soleimani — aftermath
Prices in precious metals led by gold and the oil-dominated energy sector will remain vulnerable to the almost-war situation between Tehran and Washington after President Donald Trump boldly and unexpectedly moved to kill Qassem Soleimani, Iran’s top military and intelligence operative across the Middle East.
With the US deploying even more troops in the thousands to the region, Iranian leaders continue vows of revenge while declaring an imminent end to the American presence.
Apart from a continuation of retaliatory military attacks, one point of concern for the markets will be the Strait of Hormuz through which nearly 30 percent of global oil flows. The fact that Iran may choose to deliver its threat of disrupting that could spike oil prices as well as gold once more as stocks go for another dive.
The monthly report by the US Department of Labor on the job additions to the economy is set for release this Friday — a week later than the usual due the new year’s holiday.
The US labor market remained rather strong throughout last year. The report on December employment figures will be closely watched by the markets that have been shaken by the turmoil in Western Asia. The economy added 266K jobs in November as the unemployment rate continued to stay at 3.5 percent, the lowest in 50 years.
Trade relations of the world’s two largest economies, the US and China, will top the financial agenda as officials in Beijing and Washington try to find a date to sign their Phase-1 deal.
South China Morning Post reported on Sunday that a Chinese trade delegation led by vice-premier Liu He “tentatively” plans to travel to Washington on January 13 for the signing. Remarks by both sides will eventually make it clear if the two countries agree on a certain schedule.
Brexit is back on the news
In Britain, the lawmakers will reconvene on Januar 7 to debate the Brexit deal Prime Minister Boris Johnson brought from Brussels last year. The bill is scheduled to be sent to the parliament’s upper house on Thursday as Johnson seeks to get Brexit done by the end of the month as he promised in the campaign for his last month’s victorious election. The UK pound remains under pressure due to renewed fears of a no-deal situation or lack of time for a new trade relationship with the EU.
Other than that
The situation in North Korea should remain in the focus after the hermit kingdom’s leader Kim Jong-un urged for a more proactive defense posture following recent threats of a fresh missile launch.
Monday: UK Composite PMI, UK Services PMI, China Caixin Services PMI, Germany Retail Sales PMI, Eurozone Markit Composite PMI
Tuesday: Eurozone CPI, US ISM Non-Manufacturing PMI, Canada Ivey PMI, Eurozone retail sales, US exports-imports-trade balance, API Weekly Crude Oil Stocks
Wednesday: US ADP Nonfarm Employment Change, US Crude Oil Inventories
Thursday: China CPI, PPI Eurozone ECB Account of Monetary Policy Meeting, Canada BoC Governor Poloz Speaks
Friday: Australia Retail Sales, US Nonfarm Payrolls, US Unemployment Rate, Canada Employment Change