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Wednesday kicks off with some tier 2 European data, however today all eyes will be on the FOMC meeting with markets looking for signals for when the Fed will begin to hike and start QT.
Swedish Factory Gate Inflation to Soar (0700 GMT)
Swedish PPI is likely to continue to soar in December, following a +18.1% y/y increase in November. Producer prices in Sweden were deflationary in 2020, and only began to inflate in February 2021, leading up to the 30-year high in November primarily boosted by surging energy prices.
Swedish inflation reached a 2008 high of 3.9% y/y in December and is expected to continue to grow as producer prices are passed onto consumers.
French Consumer Confidence Dip (0745 GMT)
French consumer confidence is seen moderating by one point in January to 99. Confidence beat market expectations last month due to some recovery in expected living standards and large purchases. Unemployment concerns applied downward pressure. French consumer confidence has so far failed to recover to the pre-pandemic level of 105.
US Wholesale Inventories lower (1330 GMT)
Wholesale inventories are projected to edge downwards to +1.2% m/m from +1.4% m/m in the December flash reading. This is above pre-pandemic averages, reflecting both volatile retail demand and increased propensity to buffer for acute supply chain disruptions and shortages
Bank of Canada Rate Decision: +0.25% in Sight (1500 GMT)
The Bank of Canada could use the recent surge in prices rises, with inflation at 1 30-year high of 4.8%, to raise rates Wednesday, removing some of the rate cuts in place since the start of the reaction to the global pandemic in March 2020.
Current guidance currently puts the focus on hikes in the 'middle quarters' of 2022, although markets are now pricing a greater than 50/50 chance of an earlier hike than the earliest suggested April.
The benchmark rate is currently at 0.25%, with some analysts looking for a total 1.75% of hikes in 2022 following a recent Bank survey showing inflation expectations at a record high 4.89%.
A surge is Omicron infections could offer pause to tightening signals as the BOC may see some downside risk, however with restrictions set to ease and employment at a record high the risk of higher inflationary pressures is likely to outweigh.
FOMC Rate Decision: First Hike Likely in March (1900 GMT)
The Federal Reserve's January policy decision will be the highlight of the week, with investors awaiting signals towards a March rate hike.
The Federal Reserve will likely leave policy unchanged Wednesday, although expectations are that the FOMC will now signal a first interest rate hike in the current cycle as early as March.
Financial markets are currently pricing in a 25 bps hike in March (with some analysts suggesting a possible 50bps) and a total of 4 quarter-point increases this year.
Like the BOC, Omicron is a variable, although downside risks to the economy are unlikely to be enough to stall the move to tighter policy.
An immediate end to the Asset purchase programme is a wildcard possibility, but without any signaling from policymakers seems unlikely.
The BOC monetary policy report will be published at 1500 GMT today, followed by the press conference at 1600 GMT. The FOMC statement will be out at 1900 GMT, with the press conference following at 1930 GMT.
Source: Bloomberg, MNI
| Date | GMT/Local | Impact | Flag | Country | Event |
| 26/01/2022 | 0700/0800 | ** |  | SE | PPI |
| 26/01/2022 | 0745/0845 | ** |  | FR | Consumer Sentiment |
| 26/01/2022 | 1000/1000 | * |  | UK | Index Linked Gilt Outright Auction Result |
| 26/01/2022 | 1200/0700 | ** |  | US | MBA weekly applications index |
| 26/01/2022 | 1330/0830 | ** | | US | Advance trade, advance business inventories |
| 26/01/2022 | 1500/1000 | *** |  | CA | Bank of Canada Policy Decision |
| 26/01/2022 | 1500/1000 | | CA | BOC Monetary Policy Report | |
| 26/01/2022 | 1500/1000 | *** | | US | New home sales |
| 26/01/2022 | 1530/1030 | ** | | US | DOE weekly crude oil stocks |
| 26/01/2022 | 1600/1100 | | CA | BOC Governor press conference after rate decision | |
| 26/01/2022 | 1630/1130 | ** | | US | US Treasury Auction Result for 2 Year Floating Rate Note |
| 26/01/2022 | 1900/1400 | *** | | US | FOMC Statement |
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.