The key economic releases this week are durable goods and GDP on Friday. On the political front, the focus is on the first actions of the Trump administration including moves on TPP and NAFTA. There are no scheduled Fed speeches this week.

Arond the globe, the UK Supreme Court decision on Art.50 and the Italian Constitutional Court's decision on the electoral law are on Tuesday. In EM, we have monetary policy meetings in Colombia, Hungary, Turkey, South Africa and Ukraine.

The focus this week will remain on politics, and specifically the first actions of the Trump administration - last week his spokesman promised swift moves on TPP and NAFTA - but also on the UK as the Supreme Court decision on Article 50 is due on Tuesday. On this latter, much of the focus is on whether the court issues a separate judgement which would grant the regional assemblies of Northern Ireland, Wales and Scotland the right to vote on whether the Art.50 is triggered or not.

Italian constitutional court decision on electoral law. The decision expected this Tuesday comes at a time when the main political parties are already negotiating for a new electoral law. At this point, with a partial rejection by the court being cited as a more probable outcome, a non-constitutionality decision may accelerate current negotiations for the new electoral law which aims to be more compatible with that of the Senate and favor a more proportional system.

A look at US and European main releases. In the US, focus is on durable goods orders for which we expect a 2.5% m/m growth in December (this should partially reverse prior 4.5% decline). In the advance release of 4Q GDP, we expect growth to have slowed to 2.4% qoq saar from 3.5% in the third quarter. In the Eurozone, we expect the preliminary release of January Composite PMI for Euro area to increase to 54.6 from 54.4 in December, driven by improved sentiment especially in the service sector. Moreover, we expect M3 money supply to remain unchanged at 4.8% y/y in December.

* * *

A look at key events by day courtesy of DB's Jim Reid

It’s a pretty quiet start to the week for data today with the only releases of note being the Euro area consumer confidence reading this afternoon and China’s leading economic index.

Things pick up on Tuesday however when we’ll get the various flash January PMI’s in Europe. As well as that we’ll also get the latest public sector net borrowing data in the UK. In the US the data due out includes the flash manufacturing PMI, existing home sales and Richmond Fed manufacturing survey.

Wednesday kicks off in Japan where the December trade numbers will be due. During the European session we’ll get various confidence indicators in France along with the IFO survey in Germany and CBI trends orders data in the UK. The only data due in the US on Wednesday is the FHFA house price index.

In Asia on Thursday we’ll get some data out of China with the December industrial profits numbers. During the European session we’ll get consumer confidence in Germany and the advanced Q4 GDP reading in the UK. The US calendar finally picks up on Thursday with the advance goods trade balance, wholesale inventories, initial jobless claims, flash services and composite PMI’s, new home sales, leading index and Kansas Fed manufacturing survey all due.

We close the week out in Asia on Friday with CPI in Japan. During the European session we’ll get M3 money supply for the Euro area and consumer confidence in France. Over in the US it’s all eyes on the advance Q4 GDP print in the US. We’ll also get a first look at durable and capital goods orders during December as well as the final University of Michigan consumer sentiment reading.

Away from the data there’s no Fedspeak this week with the Fed entering the blackout period. However we will hear from the ECB’s Praet, Weidmann and Lautenschlaeger at various points this week. BoE Governor Carney will also speak on Wednesday. Meanwhile earnings season will also start to ramp up with 107 S&P 500 companies set to report, accounting for about 29% of the index market cap. The notable reporters include Yahoo and McDonald’s today, Verizon and Johnson & Johnson on Tuesday, AT&T, eBay and Boeing on Wednesday, Caterpillar, Ford, Intel, Alphabet and Microsoft on Thursday followed by Chevron.

Finally, a brekadown of key events with consensus estimates via Goldman Sachs

Monday, January 23

• There are no major economic data releases expected.

Tuesday, January 24

• 09:45 AM Markit Flash US Manufacturing PMI, January preliminary (last 54.2)
• 10:00 AM Existing home sales, December (GS -4.0%, consensus -2.0%, last +0.7%): e look for a 4.0% drop in December existing homes sales, following the 0.7% rise in November. Regional housing data released so far suggest a sequential decline in closed homes sales, consistent with the November drop in pending homes sales (which represent contract signings) and the possibility that higher mortgage rates are reducing housing demand at the margin. Existing home sales are an input into the brokers' commissions component of residential investment in the GDP report.
• 10:00 AM Richmond Fed manufacturing index, January (consensus 6, last 8)

Wednesday, January 25

• 09:00 AM FHFA house price index, November (consensus +0.4%, last +0.4%): Consensus expects a 0.4% gain in the FHFA house price index in November, following October’s 0.4% rise. The FHFA house price index has a wider geographic coverage than the S&P/Case-Shiller housing price index, but is based only on properties financed with conforming mortgages. On a year-over-year basis, FHFA home prices were rising at a 6.2% pace in October.

Thursday, January 26

• 08:30 AM U.S. Census Bureau Report on Advance Economic Indicators; Advanced goods trade balance, December (GS -$66.8bn, consensus -$64.7bn, last -$66.6bn); Wholesale inventories, December preliminary (consensus +0.3%, last +1.0%): We expect the goods trade deficit to widen modestly to $66.8bn in December on top of last month’s $3.4bn deterioration to a deficit of $66.6bn. Softer outbound container traffic and a second month of elevated inbound containers suggest a widening in the ex-petroleum balance.
• 08:30 AM Initial jobless claims, week ended January 21 (GS 255k, consensus 247k, last 234k); Continuing jobless claims, week ended January 14 (last 2,046k); We expect initial jobless claims to rebound 21k to 255k. The four-week moving average of initial claims fell 10k last week to a cycle low of 247k. And unlike in previous weeks, the drop in initial claims was mirrored in continuing claims – the number of persons receiving benefits through standard programs – which declined 47k (w-o-w) to 2,046k from a recent peak of 2,116k. We remain in a period where seasonal adjustment is difficult, and the extent to which recent claims reports reflect a persistent drop in the trend pace of layoffs remains an open question.
• 09:45 AM Markit Flash US Services PMI, January preliminary (last 53.4)
• 10:00 AM New home sales, December (GS -1.5%, consensus -1.0%, last +5.2%): We expect new home sales to fall 1.5% in December, partially retracing last month’s 5.2% rise, driven by a larger-than-normal drop in temperatures and unseasonably high snowfall in the Midwest and West. Against these transient headwinds, a favorable fundamental backdrop and a fifth consecutive rise in single-family building permits reduce the likelihood of a much larger retrenchment, in our view. We plan to closely monitor housing releases in the coming months for signs that higher mortgage rates are constraining home sales, which could in turn affect the outlook for residential fixed investment.
• 10:00 AM Leading indicators, December (consensus +0.5%, last flat)
• 11:00 AM Kansas City Fed manufacturing index, January (consensus 8, last 11)

Friday, January 27

• 08:30 AM GDP (advance), Q4 (GS +2.2%, consensus +2.2%, last +3.5%); Personal consumption, Q4 (GS +2.4%, consensus +2.5%, last +3.0%): We expect a rise of +2.2% (qoq ar) in the first vintage of Q4 GDP, driven by a double-digit gain in residential investment (+13%) and a positive contribution from inventory investment (+0.8pp), but partially offset by a -1.5pp drag from net exports. We look for real personal consumption to rise 2.4%.
• 08:30 AM Durable goods orders, December preliminary (GS +4.0%, consensus +2.7%, last -4.5%); Durable goods orders ex-transportation, December preliminary (GS +0.3%, consensus +0.5%, last +0.6%); Core capital goods orders, December preliminary (GS flat, consensus +0.3%, last +0.9%); Core capital goods shipments, December preliminary (GS +0.5%, consensus +0.5%, last +0.2%): We expect durable goods orders to rise 4.0% reflecting a sharp rebound in December commercial aircraft orders; however, our expectations for the core measures are low. Despite strong manufacturing survey data in December (and so far in January), we expect core capital goods orders to remain unchanged, reflecting dollar strength, softer company results in the month, and mean reversion following November’s 0.9% rebound. December industrial production of business equipment rose 0.7% mom, its fastest pace in six months, so we expect a 0.5% rise in core capital goods shipments, after a disappointing 0.2% rise last month. Finally, we expect a 0.3% rise in durable goods orders ex-transportation, weighed down by the stronger dollar, which has risen 6% over the last six months on a trade-weighted basis. The headline orders measure is also likely to be weighed down by defense aircraft orders, which seem likely to fall sharply after doubling last month.
• 10:00 AM University of Michigan consumer sentiment, January final (GS 97.5, consensus 98.1, last 98.1): We expect the University of Michigan consumer sentiment index to fall to 97.5 in the January final estimate from the preliminary reading of 98.1, consistent with relatively buoyant consumer sentiment. The Conference Board’s consumer confidence index jumped to a new cycle high in the December report, however more timely measures have shown a small degree of sequential deterioration. After falling to a record low of 2.3% in December, the University of Michigan’s survey of 5- to 10-year ahead inflation expectations rebounded to 2.5% in the preliminary reading, and we expect similar relative firmness in the final reading as well.

Source: BofA, DB, GS