Key economic events and earnings to watch in the coming week will provide important signals for forex traders seeking to navigate global currency movements.

On Monday, Japan observes Coming of Age Day as a public holiday, with data releases including December M2 money supply and new yuan loan figures. Tuesday brings a slew of US indicators: the EIA Short-Term Energy Outlook, NFIB small business optimism for December, and the crucial Consumer Price Index (CPI) report. Markets will closely watch the CPI for inflation trends and potential Federal Reserve policy implications.

Wednesday features several key releases. Poland’s National Bank of Poland (NBP) policy announcement may influence the zloty, while US Producer Price Index (PPI) data for November and retail sales for the same month provide insights into inflation and consumer spending. China’s December trade balance data will also signal the strength of global demand into year-end.

Thursday will see the UK’s preliminary GDP estimate for November, expected to shed light on growth after a weaker October print that weighed on sterling. Eurozone November trade data and US export and import prices for December will further reveal trade dynamics. Additional US data includes the New York Fed manufacturing survey for January, weekly jobless claims for the week ending 3 January, and Chinese house price data for December.

The week concludes on Friday with US industrial production for December.

US Earnings Season Update:
FactSet projects continued but moderating earnings growth for the S&P 500 in Q4, forecasting an 8.3% year-on-year rise in earnings and 7.6% revenue growth—among the strongest since 2022. This tenth consecutive quarter of expansion reflects stronger demand and fewer negative corporate forecasts. Technology, led by semiconductors and software, is expected to drive growth alongside the Materials sector. Communication Services and Health Care should deliver solid revenue figures. Consumer Discretionary is forecast to lag, hurt by declines in automobiles and household durables, while Energy revenue may fall due to lower oil prices.

Financial sector earnings kick off next week, with modestly improved growth expectations. Large banks like JPMorgan, Bank of New York Mellon, Bank of America, Wells Fargo, Citigroup, BlackRock, Goldman Sachs, and Morgan Stanley will report. Analysts anticipate stable credit quality, resilient net interest income, robust capital markets activity, and positive contributions from insurers and brokers.

US Inflation Outlook (Tuesday’s CPI):
Wells Fargo expects December US CPI to rebound slightly on a monthly basis, with headline CPI rising 0.35% month-on-month (M/M) and core CPI increasing 0.36% M/M. Annual rates should hold steady at 2.7% for headline and 2.8% for core CPI—below September levels, signalling ongoing disinflation. The monthly uptick is likely due to unwinding distortions from government shutdown-related data disruptions in November, which exaggerated seasonal discounts.

Goods prices are expected to rebound more sharply than services as holiday discounting effects fade. Services inflation, especially in travel categories, is projected to firm, while shelter inflation should follow pre-shutdown trends. Statistical quirks persist, particularly in housing, where sampling rotations mean shutdown softness in shelter inflation could linger until April. Health and motor vehicle insurance prices are expected to restrain inflation in coming months.

The New York Fed’s December survey revealed consumer inflation expectations rose slightly to 3.4% over the next year, up from 3.2% in November, while longer-term expectations remain steady. ISM data showed manufacturing prices expanding, with the services prices index falling to its lowest level since March 2025 but still above contraction thresholds. Overall, Wells Fargo sees inflation continuing to ease, supporting a patient Fed approach.

China’s Trade Balance (Wednesday):
China’s trade surplus has now exceeded USD 1 trillion for 2025, supported by resilient exports and softer imports. ING analysts predict export growth will slow from 5.9% year-on-year (Y/Y) in November to about 3.0% in December, reflecting front-loading earlier in the quarter. Imports are expected to rise 1.6% Y/Y, slightly below November’s 1.9%. A December trade surplus of around USD 118.9 billion is forecast, bringing the full-year surplus close to USD 1.2 trillion. This robust trade position highlights China’s ongoing role in global supply chains.

US Retail Sales (Wednesday):
November retail sales will provide further clues on consumer spending trends. Bank of America’s data showed spending per household was flat month-on-month, with credit and debit card spending growth slowing to 1.3% Y/Y. While holiday season spending was strong in October and early November, it eased around Black Friday and Cyber Monday, suggesting consumers may have shopped earlier for deals. Consumer finances remain healthy with limited reliance on credit or buy now, pay later (BNPL) schemes, although BNPL usage has begun to rise slightly.

Significant disparities persist between higher- and lower-income households. Spending by higher earners rose 2.6% Y/Y, while lower-income groups gained just 0.6%. After-tax wage growth was stronger for higher-income households at 4% Y/Y compared to 1.4% for lower-income earners, underlining uneven economic dynamics.

UK GDP (Wednesday):
The UK’s November GDP estimate follows a weaker-than-expected October contraction, which saw the economy shrink by 0.1% month-on-month after a 0.1% quarterly rise in Q3. This had weighed on sterling. The Bank of England (BoE) expects no headline GDP growth in Q4, as noted in December’s statement. A more comprehensive economic assessment that includes the November Budget will be delivered in the February Monetary Policy Report (MPR).

Given pre-budget uncertainties, including reduced business confidence and delayed spending decisions highlighted by S&P PMI surveys, traders may look past the November data to some extent. Firms cited fragile client confidence, heightened risk aversion, and subdued investment spending as headwinds.

For forex traders, this calendar highlights key economic data and corporate earnings that may influence major currency pairs, including USD, JPY, GBP, CNY, and EUR. Inflation reports, trade figures and central bank decisions will be especially pertinent in assessing potential market volatility and sentiment shifts.

Original Source: Newsquawk Analysis of investinglive.com