- Sun: Japanese average cash income, Japanese SNAP poll
- Mon: Swiss consumer confidence (January), Mexican inflation (January), US consumer inflation expectations (January), Australian household spending (December)
- Fortunate: EIA STEO; Norwegian initial. CPI (Jan), US NFIB (Jan), Weekly ADP, ECI (Q4), Export/Import Prices (Dec)
- Mercury: BOC Minutes (January), OPEC MOMR; ECB Pay Tracker (after the meeting); Chinese Inflation (January), Norwegian GDP (Q4), US NFP (January)
- Teacher: IEA OMR, EU Informal Leaders Retreat; Japanese PPI (January), UK GDP preliminary. (Q4), GDP (Dec), US Weekly/Continuing Claims; Current domestic sales (January), South Korean export/import prices (January)
- Vesper: Indian WPI (January), Swiss CPI (January), EZ Initial. Employment (Q4), GDP 2nd (Q4), US CPI (January)
Japanese average cash income (Sunday): :
Japan’s December average cash earnings data is due on Sunday, with consensus expectations for headline wages to rise 0.5% to 1.0% Y/Y. The November release showed a sharp slowdown in wage growth, mainly reflecting a sharp decline in one-time bonus payments outside peak pay periods, leaving real wages sharply negative amid still-elevated inflation. ING expects a clear rebound in December, supported by strong winter bonuses and the recent decline in inflation, which will help real cash earnings turn positive. The desk says a sustained improvement in wage dynamics will strengthen the BOJ’s confidence that the wage-price cycle is taking hold, supporting the case for further rate hikes from the second quarter.
Japanese snap election (Sunday): :
Japanese Prime Minister Takaichi called for snap elections on 8 February. The goal is to take advantage of their high approval ratings and expand the LDP’s slight majority in the lower house, which would allow them to pass policy with less friction. A recent poll (February 2) through Asahi shows that the ruling coalition could gain more than 300 seats, far more than the 233 needed for a simple majority; Taking the LDP-JIP partnership forward to potentially secure a two-thirds ‘super’ majority (310 seats). Note, should the LDP-JIP secure a two-thirds majority, it can override the Upper House to pass legislation. Exit polls are typically released within minutes of polls closing (20:00 JST / 11:00 GMT / 06:00 EST), while the vast majority of single-member district results are reported within the next 2–4 hours. Under an LDP victory, the immediate market reaction is expected to see a steepening of the JGB yield curve, as this will potentially give the PM room to pursue expansionary fiscal policies. Credit Agricole expects gains to be accompanied by gains in Nikkei and USD/JPY. If the LDP-JIP bloc needs support from another party, possibly the DPP or Sansito, there could be a price for fiscal and political uncertainty, as opposition partners could push for income tax cuts or broader VAT cuts, potentially triggering a deep selloff in the JGB. Should the LDP lose, a new government would likely induce a flattening yield curve and JPY strength, indicating the potential for greater fiscal restraint than Takaichi and a higher tolerance for BOJ rate hikes. Crédit Agricole expects this to lift short-end yields and flatten the JGB curve. An in-depth preview can be found here.
Survey of Japanese economy watchers (Mon):
Japan’s Economy Watchers survey for January is due on February 9. The Current Situation Index fell to 48.6 in December, remaining below the 50 threshold, while the Outlook Index rose to 50.5, indicating cautious optimism for the coming months. The survey is closely watched by the BOJ as a key indicator of private consumption and services-sector momentum. Any further improvement in services-related sentiment would support the Bank’s view that services price inflation is becoming more sustainable.
BOC Minutes (Wednesday): :
The minutes followed a January decision to keep rates at 2.25%, in line with expectations and matching the low end of the BoC’s own neutral estimate. The statement focused on uncertainty, saying it remains elevated and that risks are being closely monitored, and said the central bank stands ready to respond if the outlook changes. The monetary policy report left near-term inflation forecasts unchanged, but raised the fourth quarter 2026 forecast, while quarterly GDP forecasts were lifted to 2026. Since then, Governor Macklem has warned that the BOC should be careful not to misdiagnose economic weakness amid structural shifts in the Canadian economy following the deterioration in relations with the United States. He said cutting rates in response to weak activity risked increasing inflation in the future if the weakness reflected reduced productive capacity rather than a cyclical demand decline, and excessive demand could delay necessary adjustments when the problem was structural. It appears that barring a sharp change in outlook, the BOC will remain on hold in the near term, with market pricing seeing an upside of around 9 bps by the end of the year.
Sugar Inflation (Wednesday):
China is set to publish its January CPI and PPI data following December’s data, with headline CPI rising 0.8% Y/Y, a 34-month high, driven mainly by food prices, while core inflation stood at 1.2% and producer prices remained in deflation at -1.9% Y/Y. ING expects inflation pressures to ease in January, with the CPI forecast at 0.5% Y/Y as the impact of the Lunar New Year weighed on prices, while the PPI remains negative for the 40th consecutive month, but is improving to around -1.3% Y/Y amid stronger commodity prices. Analysts have consistently warned that underlying demand remains weak despite the recent rise in headline inflation, with overcapacity and factory-gate deflation remaining key headwinds. As a result, the data is unlikely to change expectations for further policy support this year.
US Jobs Report (Wednesday):
NOTE: The January jobs report, originally scheduled for February 6, was rescheduled for Wednesday, February 11 at 08:30 EST/13:30 GMT due to the partial US government shutdown. Recent labor market data has shown resilience despite other policy challenges. During the week corresponding to the traditional BLS survey window, weekly initial jobless claims remained low at 210k after the revision, compared with 224k before the December data. Continuing claims declined to 1.827 million in the survey week from 1.914 million in the December report. “There is no evidence that layoffs are increasing. There are companies that are trying to reduce their workforce, but this is being done almost exclusively through job cuts rather than outright job cuts,” said Sanchez, adding that “layoffs on an underlying basis are broadly stable.” Wells Fargo expects the January report to leave the labor market picture largely unchanged, with payroll growth of about 80k and unemployment holding steady at 4.4%, noting that fewer seasonal layoffs could temporarily boost hiring. Unemployment risks still appear to be on the upside, while benchmark revisions are likely to reveal that job growth was weak last year, leading to a gradual cooling of labor market support for income and consumption. At its January meeting, the Fed changed its risk characteristic of the labor market, from “Job gains have slowed this year, and the unemployment rate has risen through September,” to “Job gains remain low, and the unemployment rate has shown some signs of stabilization,” which analysts described as a positive upgrade. Nevertheless, Chair Powell said that both the upside and downside risks to employment have reduced but not disappeared, making it difficult to judge whether the mandate risks are fully balanced. Traders will also keep an eye on any impacts of extreme weather. Oxford Economics said storms occurring during the payroll reference period have historically had a greater negative impact on net nonfarm employment and hours worked, particularly in manufacturing, but also said the latest storm falls outside that window, which should limit potential negative impacts on the January report.
UK GDP (Guru): :
The UK is about to release preliminary Q4 GDP along with December’s monthly output. Consensus expectation is that Q4 GDP growth will be 0.1% Q/Q to 0.2% and 1.3% Y/Y, with December GDP growth expected to be 0.1% to 0.3% M/M. Investec expects a softer 0.2% m/m print for December after November’s strong 0.3% rebound, which was boosted by strong retail sales as well as an improvement in car production following the Jaguar Land Rover cyberattack. While most of the output bounce is likely to occur in November, residual strength from the auto backlog, stable services output and modest improvement in manufacturing are seen supporting December activity. On this basis, Investec estimates fourth-quarter GDP growth at 0.2% Q/Q, slightly up from 0.1% in the third quarter, and says this will provide a constructive handover in Q1, where growth is expected to strengthen further.
US CPI (Fri):
NOTE: The January consumer prices report, originally scheduled for February 11, was pushed back to February 13 at 08:30 EST/13:30 GMT due to the partial US government shutdown. While the Fed’s January statement upgraded its economic assessment by replacing “economic activity is growing at a moderate pace” with “expansion at a solid pace”, “job gains have slowed this year” with “job gains have been subdued”, and “the unemployment rate has increased” with “showed some signs of stability”, it added that “inflation has moderated somewhat”, relatively unchanged from its prior view that “inflation It has increased from earlier in the year and remains somewhat elevated”. At the press conference after the meeting, Chair Powell said that inflation has made limited net progress over the past year, with core PCE showing little improvement. He said most of the increase stemmed from commodity prices, driven primarily by tariffs, which he described as a one-time effect rather than a demand-driven effect. Powell said many of the tariff effects have already passed through the economy and expects inflation related to goods and tariffs to peak around the middle of the year. Inflation remains somewhat elevated, but recent results have been broadly in line with expectations. He said short-term market-based inflation expectations have fully recovered, while longer-term measures indicate confidence in a return to the Fed’s 2% target. Powell said incoming data points to a clear improvement in the outlook, adding that confirmation that tariff impacts are diminishing would support policy easing. Some analysts have recently highlighted the inflation measure Truflation, which suggests that price pressures are easing. Pantheon Macroeconomics, however, argues that the sharp decline in the daily measure of inflation is more than deflation, noting that it is largely driven by new rents and mortgage interest costs that respond quickly to market changes, while the official CPI uses broader, delayed shelter measures, indicating a much more gradual decline. Pantheon considers inflation to be useful for specific components, but not a reliable guide to headline inflation.
This article originally appeared on NewsQuotes.
