Market Analysis

The Week Ahead: Jan. 6-12, 2013

Chinese new yuan loans, US crop yields and a number reports on trade and industrial production globally are due in the week ahead.

Monday, 1/7:

Australia November trade balance

UK December Halifax home price index

Eurozone November PPI

Canada December Ivey PMI

The Ivey purchasing managers index measures month-to-month changes by purchasing managers across sectors and regions in Canada.

Tuesday, 1/8:

Germany and France November international trade

Eurozone November retail sales and unemployment

Germany November factory orders

US November consumer credit

China December CPI and PPI

It’s likely the Chinese government pays keen interest to these inflation indicators as officials continue their stimulus efforts in this new leadership year.

Wednesday, 1/9:

China December international trade

UK November international trade

Eurozone revised Q3 GDP

Italy Q3 unemployment

Germany November industrial production

Canada December housing starts

New Zealand November international trade

Thursday, 1/10:

France December CPI and November industrial production

Bank of England and ECB monetary policy announcements

US weekly jobless claims

US weekly money supply

Ever since the Fed implemented its near-zero interest rate policy, money supply aggregates have become important indicators of the effectiveness of its efforts. So far, M2 money velocity, a key metric showing how quickly money changes hands within the economy and a key determinant of inflation, is historically low. We covered the causes of this and what it means for the economy in several recent pieces.

China Q4 new yuan loans

China controls monetary policy through its use of loan quotas. This restricts the amount of money flowing into the economy in any given year. Although actual loans are typically seen as an indicator of the government’s willingness to lend or of folks willingness to borrow, Q4 typically dips before the government announces a new loan quota in Q1. Additionally, following measures to broaden corporate borrowing options and liberalize debt markets last year, “total social financing” has apparently become officials’ preferred gauge of overall lending.

Friday, 1/11:

Czech Republic presidential elections

The first round of two, the President is elected by majority vote to serve a five-year term. This election is of particular note, as it’ll be the first time Czech citizens directly elect their president. (Previously, the office had been filled by a Parliamentary vote.)

US international trade

US import and export prices

UK and Mexico industrial production

USDA reports on crop yields

Following a severe drought last year, many will look to the report as a sign of the commodities markets’ health. However, those fearing lower crop yields might exacerbate overall higher consumer costs and therefore sting the economy likely underestimate consumers’ overall resilience. What’s more, raw commodities costs make up only a small, quite variable part of retail food costs. Revisit our 7/20/2012 cover story, “Gotta Have My Pops!” for more.

Saturday, 1/12:

China business climate index

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*The content contained in this article represents only the opinions and viewpoints of the Fisher Investments editorial staff.