While Fed and ECB officials pushed back expectations of interest rate cuts for later than anticipated amidst strong data and the rebound in inflation, the upcoming week is also expected to maintain the centre of the debate around central banks. In addition, key data is expected in the US as well as preliminary PMIs on both sides of the ocean.

On the US calendar, flash Manufacturing and Services PMIs for the month of January are due on January 24 ahead of a slew of data releases on January 25: Durable Goods Orders, another revision of the Q4 GDP Growth Rate, weekly Initial Claims, the Chicago Fed National Activity Index, and New Home Sales. Closing the week comes another version of inflation, this time tracked by the PCE along with Personal Income, Personal Spending, and Pending Home Sales. Stronger-than-estimated results from key fundamentals and their impact on the Fed rate cut bets were the main drivers of the USD Index (DXY) during the past week. In light of those upcoming releases, the so-far 2024 peak around 103.70 could be challenged.

In the euro docket, the European Commission will publish its preliminary print of Consumer Confidence for the current month on January 23. Advanced January PMIs are also due in Germany and the broader Euroland on January 25. On January 26, the IFO institute will publish its Business Climate gauge in Germany, while GfK will measure its Consumer Confidence for the month of February. In the meantime, EUR/USD seems to have met some contention around 1.0840, a region also reinforced by the 200-day SMA.

In Japan, December Balance of Trade figures are due along with flash PMIs (January 24) and the BoJ Minutes on January 26. USD/JPY maintained the bullish view intact this week, advancing to seven-week tops in levels shy of the 149.00 barrier.

Across the Channel, the Public Sector finances take centre stage on January 23, followed by preliminary PMIs (January 24) and Gfk’s Consumer Confidence on January 26. GBP/USD closed the week with modest losses, although it maintained the yearly consolidation between 1.2600 and 1.2800.

Flash PMIs will take centre stage in Australia (January 23), ahead of the Westpac Leading Index (January 24). Australian markets will be closed on January 26 in observance of the Australia Day holiday. AUD/USD extended its pessimistic start of the year for yet another week, although the decent bounce in the latter part of the week allows for some near-term recovery.

In the central bank's galaxy, the PBoC is seen trimming its 1-Year LPR and 5-Year LPR by 10 bps to 3.35% and 4.10%, respectively (January 21). No surprises are expected from the BoJ at its event on January 23, nor from the BoC and the BNM when they meet on January 24. On January 25, a 25 bps rate hike is not ruled out by the Norges Bank, while the ECB is widely anticipated to keep rates unchanged and uncertain remains around the interest rate decision by the CBRT.