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By HaleStewart January 25, 2015 8:46 am
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International Economic Preview For the Week of January 26-30

          The following economic releases will have a disproportionate impact on trading in the coming week.


Japanese CGPI: Although Japanese prices ramped up after the BOJs initial monetary policy actions, they have since stalled in their advancement.  The CSPI is no exception, as shown in this chart from the latest release:


UK GDP: this is the first reading of 4Q14 UK GDP.  The last four readings of the UK’s annual GDP growth rate have been positive, ranging from 2.4%-2.6%.   There is no reason to expect a downside surprise, as all the recent numbers have been good.

US Durable Goods: the total amount of US durable goods orders has been in a fairly tight range for the last year, save for a one month bump caused by a large aircraft order.  This is mildly concerning as we’d like to see the overall level to continue moving higher.  But, the number has fully recovered from its recession collapse.

Australia CPI: after moving higher for the better part of two years, Australian CPI dropped to about the 2.5% level in its latest reading.  Considering the underlying weakness in the latest business sentiment indexes combined with the economy’s trouble shifting away from an export/raw materials model, lower inflation may give the Australian central bank the leeway it needs to lower rates, which currently stand at 2.5%. 


EU loans: the EU Y/Y rate of loans to the private sector has been dropping for the last few years, which is a primary reason why the ECB moved to engage in its own version of QE this month.  There is no reason to think the rate of growth has changed in any way since the latest report.

Japanese CPI and Industrial Production: see the notes above on Japanese CSPI.  As for industrial production, it was dropping for the first three quarters of 2014, but has since increased.  Hopefully, this trend will continue:


US GDP: this is the first reading of US 4Q14 GDP.  There will be two other releases, as the BEA obtains more data.  However, all indicators are for a strong reading.

Canadian GDP: although Canada’s overall annual growth rate has been fairly good for the last four readings, their economy is overly dependent on oil prices.  As these were dropping for the entire 4th quarter, a downside surprise may be in the cards.

Hale Stewart is a former bond broker who has been writing about economics and financial markets since 2006 on the Bonddad Blog.  He is also a tax attorney with a domestic and international practice while also forming and managing captive insurance companies for US companies.   You can follow him on twitter at:@captivelawyer

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