Moods on the stock market remained positive this week even despite rising inflation concerns. The latest US CPI reading revealed consumer prices rose at the fastest pace in over 30 years and strengthened the case that central banks are behind the curve, meaning the US Fed and other central banks will likely bring forward interest rate hikes. Next week, investors will focus on US and China factory and retail sales reports. Apart from that, the British pound may also get a chance to move on Tuesday when jobs data will be released. Last but not least, GDP figures from the Eurozone and Japan could trigger large market moves. Be sure to watch CHNComp, GBPUSD and EURJPY next week.
CHNComp
Key data from China this week will be released on Monday - industrial production and retail sales updates for October. Both readings are expected to show deterioration. However, a bigger than expected miss could add to already sour moods on Chinese stock exchanges. On Wednesday CHNComp dropped to the lowest level since early October, however it managed to erase some losses at the end of the week.
GBPUSD
GBPUSD dropped this week, mostly on the back of USD strengthening. The pair will get a chance to move on Tuesday when UK labour market and US retail sales figures will be released. Also traders should keep on guard on Wednesday as UK CPI reading for October will be published. Both readings from the UK are especially important for the Bank of England, which stated that the interest rate hike would be dependent on the improvement in the labor market and the pace of inflation growth.
EURJPY
EURJPY continued a downward move this week and tested the 130.50 mark. Currency pair may get a chance to recover next week, when the updated third quarter Eurozone GDP report will be released on Tuesday. The flash release showed a surprisingly strong 2.2% increase. Meanwhile Japan's preliminary GDP reading will be published on Monday and is expected to show a slowdown, fueled by supply bottlenecks. Markets anticipate that Prime Minister Kishida will announce more economic stimulus measures at the end of the week. A bigger drop in growth than that expected could translate into a larger package.
