Key economic events this week: Inflation data, India Q3 earnings, US banks’ Q4 results and more

Important macroeconomic data releases from India and around the world in the upcoming week. (Representative Image)

Several macroeconomic events are scheduled for this week in India and around the world. India will release important economic data, including retail inflation, as measured by the Consumer Price Index (CPI), and industrial production as measured by the Index of Industrial Production (IIP), on January 12. While the RBI uses CPI data to prepare its bi-monthly monetary policy, IIP tracks changes in the level of industrial production.

Other major global economic data releases will be CPI data from the US, Tokyo and China. China's December economic figures are also eagerly awaited following the end of Covid lockdowns and restrictions in the country.

In addition, UK will publish GDP numbers for November. The most notable report from the European Union is the unemployment data, while Russia will release its inflation data on January 11.

In India, Tata Consultancy Services (TCS), Infosys, Wipro, and HCL Tech are set to release their Q3FY2023 results, thereby kickstarting the Q3 earnings season in the country. In the United States, the fourth-quarter earnings season begins on January 13, with large banks such as JP Morgan, Citigroup, Wells Fargo & Company, and Bank of America reporting their earnings.

Let's take a look at the key economic data releases for the week beginning January 9:

January 10 (Tuesday)

US Federal Reserve Chair Jerome Powell to deliver speech

Fed Chairman Powell will take part in a panel discussion in Stockholm titled "Central Bank independence and the mandate - evolving views," hosted by Sweden's Riksbank. Powell has not made any public statements since the FOMC press conference in December, so traders will be watching for his remarks. Other notable speakers include the Bank of England's Bailey, the Bank of Canada's Macklem, and the Bank of Japan's Kuroda, who is about to leave the central bank.

Japan: Tokyo December CPI data 

In Japan, the December CPI, a leading indicator of inflation trends, estimates for the Tokyo region are due on January 10. In November, core consumer prices in Japan's capital rose at their fastest annual rate in 40 years, exceeding the central bank's 2 percent target for the sixth consecutive month. According to government data, the Tokyo core consumer price index (CPI), which excludes fresh food but includes fuel, was 3.6 percent higher in November than a year ago. The CPI data is one of the key factors used by the BOJ when it issues new quarterly inflation forecasts at a two-day policy meeting ending on January 18.

According to a Reuters poll of economists conducted on January 6, consumer prices in Japan's capital rose at the fastest rate in nearly 41 years in December. According to the economists, CPI in Tokyo was expected to have risen 3.8 percent year on year in December due to widening retail price increases.

January 12 (Thursday)

India December CPI and November Industrial Production data

India's National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI), is scheduled to release the country's Consumer Price Index (CPI) data for Rural, Urban, and Combined for the month of December 2022, as well as Industrial Production (IIP) data for the month of November, on January 12.

India's retail inflation rate, as measured by the CPI, fell to an 11-month low of 5.88 percent in November, down from 6.77 percent in October.  The November food inflation figure of 4.67 percent is also the lowest in 11 months. Importantly, the CPI food index fell 0.9 percent month on month in November, indicating price moderation.

The sharp drop in inflation should provide relief to the RBI, which has been raising interest rates since May.

Industrial output (IIP) fell by 4 percent in October.  This is the Indian industry's worst performance in over two years. Manufacturing had the worst month in October, with output falling by 5.6 percent. Meanwhile, mining and electricity grew by 2.5 percent and 1.2 percent, respectively.

US Consumer Price Index (CPI) for December

The US Bureau of Labor Statistics (BLS) will release December 2022 CPI data on January 12. The CPI measures changes in consumer prices for goods and services.

Both headline and core CPI readings in the US have been trending downward in the last two months. This data could be the big market move in the upcoming week. According to the US BLS, CPI rose 0.1 percent in November after rising 0.4 percent in October. For the year ending November, the all items index increased by 7.1 percent.

The Fed will also keep an eye on inflation readings. Fed officials expressed concern at their December meeting that inflation could be higher than expected.

China CPI data for December

China will release its December inflation figures on On January 12. There will be updates on Chinese inflation via the Consumer Price Index (CPI) and the Producer Price Index (PPI) (PPI).

Growth in the world's second-largest economy slowed last year, owing largely to the unyielding COVID-19 curbs. In November 2022, China experienced slowing CPI growth and negative PPI.

The CPI in China rose by 1.6 percent year on year in November, while the producer price index (PPI) fell by 1.3 percent, remaining unchanged from October.

While consumer inflation slowed to its slowest rate in eight months in November, factory-gate prices fell for the second month in a row, indicating weak activity and soft demand in an economy hampered by tough pandemic controls.

ECB meeting minutes

The minutes of the European Central Bank's December meeting will be made public on On January 12. The minutes may reveal how the ECB intends to raise interest rates in the future. The ECB raised interest rates by 0.5 percentage point to 2 percent on December 15, its fourth consecutive increase.

According to the ECB's press release, the bank's Governing Council expects to raise them significantly further because inflation remains far too high and is expected to remain above the target for far too long. Annual inflation in the Eurozone is expected to be 9.2 percent in December 2022, down from 10.1 percent in November.

January 13 (Friday)

India trade data for December

India's December trade data is expected on January 13. According to the commerce ministry, exports posted 0.6 percent increase in November on a year-on-year basis to $31.99 billion. Exports contracted 17 percent in October to $29.78 billion. Imports posted a 5.4 percent rise to $55.88 billion. The merchandise trade deficit fell to $23.89 billion in November - the lowest in seven month, from $26.9 billion in October.

UK November GDP data

Gross domestic product (GDP) measures the value of goods and services produced. It estimates the size of and growth in the economy. According to the Office for National Statistics (ONS), GDP fell by 0.3 percent in the three months to October 2022 compared to the same period in the previous year. After falling by 0.8 percent in September 2022, the services sector grew by 0.6 percent in October 2022.

Earnings from India and the US in the coming week

The upcoming week is packed with economically significant earnings results from the financial, information technology, and retail sector companies.

In India, the earnings season begins on January 9. Q3FY23 earnings will be started by TCS on January 9, followed by Infosys and HCL Tech on January 12 and Wipro on January 13.  Market participants will also be watching other important results scheduled to come out from Cyient (January 12), L&T Financial Holdings, Just Dial, Heritage Foods (January 13), and HDFC Bank and Avenue Supermart (January 14).

The Q4 earnings season kicks off in the US with Jefferies Financial reporting on January 9. Q4 reports will come out on January 13 from major banks such as JP Morgan Chase, Citigroup, Wells Fargo & Company and Bank of America. UnitedHealth Group, and Delta Air Lines will also report their financial results.

(With inputs from Reuters)