As we move further into 2025, global markets are bracing for another eventful week. Last week ended with a bang as the US Non-Farm Payrolls report exceeded expectations, fueling speculation about the Federal Reserve’s rate path. This week, the spotlight shifts to inflation data and major geopolitical developments, including the anticipated inauguration of President-elect Donald Trump. With key economic data from the US, UK, Australia, and China, market participants can expect a dynamic trading environment.

Here’s a detailed day-by-day breakdown of the major risk events scheduled this week:

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Monday: A Quiet Start

• Asian Session:
  • Japanese markets will remain closed, reducing overall liquidity in the region.
  • Market sentiment will likely continue to digest Friday’s stronger-than-expected US employment data.
• European & US Sessions:
  • Sparse event calendars across both regions may lead to subdued trading activity.

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Tuesday: PPI Data Takes the Stage

• Asian Session:
  • Japanese markets reopen, although no significant regional data releases are expected.
• European Session:
  • A quiet day with no major scheduled economic updates.
• US Session:
  • Key Data Release: Producer Price Index (PPI) for December 2024.
    • This report will provide insights into upstream inflation pressures, potentially influencing Fed policy expectations.

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Wednesday: CPI Data Dominates Focus

• Asian Session:
  • Limited activity expected in Asia, with markets looking ahead to critical data from Western economies.
• European Session:
  • Key Data Release: UK Consumer Price Index (CPI) for December 2024.
    • Inflation trends in the UK will be closely monitored, particularly in the context of evolving Bank of England rate expectations.
• US Session:
  • Key Data Releases:
    • US CPI data for December 2024 (1:30 PM GMT).
      • Economists forecast year-on-year headline inflation to rise to 2.8%, with core inflation remaining steady at 3.3%.
    • Empire State Manufacturing Index, providing insights into regional business conditions.
  • FOMC Activity:
    • Several Federal Open Market Committee (FOMC) members are scheduled to speak, potentially offering clues about the Fed’s outlook on rates and inflation.

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Thursday: A Packed Schedule

• Asian Session:
  • Key Data Release: Australian Employment Report.
    • This will shed light on the labor market’s strength and its implications for the Reserve Bank of Australia’s monetary policy.
• European Session:
  • Key Data Release: UK GDP figures for Q4 2024.
    • The data will reveal how the UK economy fared amidst ongoing macroeconomic challenges.
• US Session:
  • Key Data Releases (all scheduled simultaneously):
    • Retail Sales numbers for December 2024.
    • Weekly Unemployment Claims.
    • Philadelphia Fed Manufacturing Index.
  • These reports collectively could trigger significant volatility, shaping the narrative for US economic momentum.

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Friday: Closing the Week with Key Releases

• Asian Session:
  • Key Data Releases from China:
    • GDP for Q4 2024.
    • Industrial Production and Retail Sales figures.
    • These metrics will offer a glimpse into the health of the world’s second-largest economy as it navigates global headwinds.
• European Session:
  • Key Data Release: UK Retail Sales for December 2024.
    • The report will provide an indication of consumer spending trends during the critical holiday season.
• US Session:
  • Key Data Release: US Building Permits.
    • A relatively quieter session compared to earlier in the week.

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Key Themes to Watch

1. US Inflation Outlook:
   • December’s CPI data will be the most closely watched indicator, with potential implications for Federal Reserve policy decisions.
2. Market Reaction to Trump’s Inauguration:
   • Investors will scrutinize updates related to the incoming US administration and its proposed economic policies.
3. Global Data Releases:
   • Critical economic updates from the UK, Australia, and China will influence sentiment across regional markets.

Prepare for a week of high-impact data releases and geopolitical developments that could set the tone for markets as 2025 unfolds.