Weekly outlook, 52nd week

The year ends with mixed data!

Merry Christmas! We hope you receive one blessing after another this coming year! While we will have the last week of this year, that mixed data confused investors and market participants. They are mixed because some parts of the data show improvement despite disappointments in other sectors in the same economy. Moreover, we can see these differences between countries in the bigger picture as well. However, these differences in the economic growth rate can keep us optimistic for the following year. Lets' see what we have to watch closely in the last week of 2022.

Japanese data - Tuesday & Wednesday

The week will start with Christmas Holiday on Monday. Moreover, while some economies will continue their holidays on Tuesday, Japan will release its Labor Market data and Retail Sales numbers, and the Central Bank governor will give a speech. Like most developed and improving economies, the Japanese also had uneven growth throughout 2022. We expect the rising job applications compared to actual jobs, which is in line with slower retail sales in November at 3.7%, down from 4.4% seen in October, can give us a weaker outlook for the economy. On the other side, Industrial production on Wednesday is supposed to fall -0.3% in November, which is better than the -3.2% fall in October. Expected data should help the Yen against its crosses.

S&P Home Price Index - Tuesday

After a long time raising prices from February 2020 until this summer, house prices in the US recently started to decrease. According to the Case-Shiller HPI, Home prices declined 2.2% from July through September. Higher mortgage rates and a cooling economy turned prices negative in parts of the country, which is expected to continue as the Fed is still planning to raise rates and hold them for a longer time. In November, house prices are expected to fall by 1%, better than the 4.6% fall in October, which can be due to buying before New Year’s Eve.

China PMIs – Friday

China's November PMI should reflect the rebound in COVID cases over the past several weeks. We expect softer Service activities in December by falling to 46.5, but in December, manufacturing PMI is forecast to edge up to 48.3. Recently China government eased some COVID-related restrictions, which can offer some encouragement for a firming in economic activities going forward. These data are supposed to help the Yuan against its crosses.

Warning of the last week!

Since it is the last week of the year and it starts and ends with Holidays on Monday and Friday in the most developed economies, most traders and investors will be out of the market. Fewer traders and investors mean less liquidity; therefore, spreads can increase, and prices will have sharp movements with no reason but a lack of liquidity. Thus, while it can create an exciting chart for scalping, it can sometimes be risky, so please be careful about your positions.