Week ahead - Powell Headlines → CPI Print → Retail Sales Reality Check

This week is basically one question: is US disinflation stalling just as growth re-accelerates? Markets will trade the USD through the lens of “higher-for-longer” risk. Expect rates first, USD second, equities last—especially around the two big 3:30 PM clusters.

Monday (January 12) — Powell headline risk

3:00 AM — USD — Fed's Chair Powell speech

• Numbers: locked (no details)

• What it implies: This is headline-driven—any hint on timing/comfort with inflation progress can swing pricing.

  • If he leans on “need more confidence” → hawkish tilt (front-end yields up, USD bid).

  • If he emphasizes “progress continues”/downplays upside risks → dovish tilt (yields down, USD softer).

• Most sensitive assets:

  • USD FX: DXY, USDJPY (rates-sensitive), EURUSD

  • Rates: 2Y/5Y Treasury yields (fastest reaction)

  • Equities: rate-sensitive growth/Nasdaq (second-order move)

  • Gold: often inverse to real yields / USD

  
  

Tuesday (January 13) — The week’s main event: US CPI

3:30 PM — USD — Consumer Price Index (MoM) (Dec)

• Actual vs Consensus vs Previous: — vs 0.3% vs 0.3%

• Trade it like: Confirmation print—no relief, no panic unless it breaks the range.

3:30 PM — USD — Consumer Price Index (YoY) (Dec)

• Actual vs Consensus vs Previous: — vs 2.7% vs 2.7%

• Trade it like: YoY is the headline, but the market will likely key off core MoM for Fed-path.

3:30 PM — USD — CPI ex Food & Energy (MoM) (Dec) (core MoM)

• Actual vs Consensus vs Previous: — vs 0.3% vs 0.2%

• What it implies: A forecasted step-up in core momentum is hawkish at the margin—it keeps the “sticky inflation” narrative alive.

3:30 PM — USD — CPI ex Food & Energy (YoY) (Dec) (core YoY)

• Actual vs Consensus vs Previous: — vs 2.7% vs 2.6%

• What it implies: Drift higher = inflation risk, tougher to justify fast easing.

Assets most sensitive (USD week’s centerpiece):

• FX: USDJPY and DXY typically react first (rates channel). EURUSD next.

• Rates: 2Y Treasury is the “Fed bet” barometer; curve can bear-flatten on hot CPI.

• Equities: initial knee-jerk can fade; watch real yields for direction.

• Commodities: gold often inversely tracks real yields; oil is more growth/geopolitics-driven but can react to risk tone.

The “3-wave reaction” (CPI edition):

1. Headline/core MoM flash (first 30–60 seconds): fastest move in 2Y + USDJPY.

2. Details digestion (next 5–15 minutes): shelter/services, supercore proxies—market decides if it’s “one-off” or trend.

3. Repricing across risk (next 30–120 minutes): equities and credit follow the rates verdict; FX consolidates around the new yield level.

Scenario framing:

• If more hawkish than expected (hotter core MoM / upside YoY):

  • 2Y yields up, curve potentially flattens

  • USD bid (USDJPY up, EURUSD down)

  • Equities risk-off, especially high duration/tech

  • Gold pressured via higher real yields

• If more dovish than expected (softer core MoM / downside):

  • Front-end yields drop

  • USD offered

  • Equities risk-on (duration catches a bid)

  • Gold supported

Wednesday (January 14) — Same-time pile-up: inflation pipeline + consumption

3:30 PM — USD — Producer Price Index ex Food & Energy (YoY) (Oct)

• Actual vs Consensus vs Previous: — vs — vs 2.6%

• What it implies: Less tradable alone (dated), but can color the “pipeline inflation” vibe.

3:30 PM — USD — Retail Sales (MoM) (Nov)

• Actual vs Consensus vs Previous: — vs 0.4% vs 0%

• What it implies: Forecast rebound = growth-supportive, and potentially hawkish if markets think demand stays too hot.

3:30 PM — USD — Retail Sales Control Group (Nov)

• Actual vs Consensus vs Previous: — vs — vs 0.8%

• What it implies: This is the GDP-relevant slice. If it stays firm, it reinforces “soft landing / no rush to cut”.

3:30 PM — USD — Producer Price Index ex Food & Energy (YoY) (Nov)

• Actual vs Consensus vs Previous: — vs 2.7% vs —

• What it implies: If PPI runs hot after CPI, it can extend the move—especially in front-end yields.

Most sensitive assets:

• Rates + USD again lead (these are macro repricing prints).

• Equities react through the growth vs rates tug-of-war:

  • Strong sales + firm PPI → yields up can cap equity upside.

  • Weak sales + soft PPI → yields down can boost equities and pressure USD.

Friday (January 16) — Eurozone check-in (usually lower vol unless it surprises)

9:00 AM — EUR — Harmonized Index of Consumer Prices (YoY) (Dec)

• Actual vs Consensus vs Previous: — vs 2% vs 2%

• What it implies: A steady print is status quo. Surprise matters mainly for EUR rates expectations.

• Most sensitive assets:

  • EUR FX: EURUSD, EURGBP

  • Rates: Bunds / front-end EUR rates

  • Equities: secondary via rates (banks vs growth split)

Volatility Windows

• Monday 3:00 AM: Powell (locked) → headline-driven whipsaws in USD and front-end yields.

• Tuesday 3:30 PM: CPI cluster (headline + core, MoM + YoY) → week’s biggest impulse move window.

• Wednesday 3:30 PM: Retail Sales + Control Group + core PPI (plus the dated Oct line) → second-biggest repricing window, especially if it contradicts Tuesday.

• Friday 9:00 AM: EUR HICP final → usually moderate, but can move EUR if it breaks expectations.

Top 5 Market-Moving Moments

1. Tue 3:30 PM — USD CPI (core MoM + core YoY focus)

2. Wed 3:30 PM — USD Retail Sales (MoM) + Control Group

3. Wed 3:30 PM — USD Core PPI (Nov YoY)

4. Mon 3:00 AM — Powell speech (locked headline risk) 

5. Fri 9:00 AM — EUR HICP YoY (Dec)

Not investment advice, do your own research.