1- Fed Minutes and Officials’ Speeches
The Federal Reserve is set to release the minutes of its December meeting on Wednesday, during which a 25-basis-point rate cut, the third consecutive one, was decided. Fed Chair Jerome Powell described this move as a “tough decision,” reflecting a division among members on the appropriate monetary policy direction.
Analysts at Deutsche Bank indicate that the minutes revealed clear differences in views regarding the measures taken at the meeting. Investors are eagerly awaiting any hints on how the Fed’s expectations might be influenced by potential changes in fiscal, trade, and immigration policies.
2- Inflation Data
The European Central Bank faces a new test this week with the release of preliminary Eurozone inflation data on Tuesday. Expectations suggest the possibility of continued inflation decline. If this materializes, it could give the ECB room to adopt more growth-supportive policies, especially as the region’s economy continues to face challenges.
Germany and France are set to release their inflation data on Monday, while China will publish its annual inflation figures for consumers and producers on Thursday. Preliminary estimates indicate that China’s inflation remained low in December, while producer price data suggests ongoing contraction, highlighting the challenges government stimulus measures face in boosting domestic demand.
3- Oil Prices
Oil markets experienced strong gains last week, driven by increased fuel demand due to cold weather across Europe and the U.S., alongside economic stimulus plans announced by China.
Brent crude ended the week with a 3.3% increase, while U.S. crude oil futures posted a notable 5% gain. Projections suggest continued support for oil prices, with anticipated higher demand for heating oil due to upcoming cold waves in certain regions.
However, the rising value of the U.S. dollar may limit future gains in oil prices. This is attributed to the U.S. economy’s strength compared to its global peers and expectations that U.S. interest rates will remain relatively high for an extended period.
