A review of the week past and the week ahead 11th of January

What mattered last week:

• A strong start to the year as the S&P500 closed the week +1.83% higher at 3825, another record close.
• Supported by prospects of more stimulus following the Democrats winning both Georgia Senate elections.
• And despite the continued acceleration of new COVID19 cases in the UK, EU, and the US.
• Congress confirmed that Joe Biden won the US Presidential election.
• Volatility, as measured by the VIX index dropped -5.23%, to 21.6.
• U.S. 10-year yields rose 20bps to near 1.12%.
• In response to the rise in yields, gold fell -2.59%, to close near $1850.
• Crude oil rose over +7%, to close at $52.24/bbl supported by Saudi output cuts.
• The ASX200 started the year strongly rising +2.59% to close at 6757.9.
• In FX, the AUDUSD rose +0.87% to close near .7760, on the back of buoyant risk sentiment and strong commodity prices.

For the week ahead, the key events are:

Australia: Housing finance (Friday).

New Zealand: Building approvals (Thursday).

China: CPI (Monday), balance of trade, new yuan loans, and total social financing (Thursday), house price index (Friday).

• CPI (Monday): Inflation is expected to rise by 0.1% in December from -0.5% y/y.

Japan: Current account, (Tuesday), machinery orders, and PPI (Thursday).

U.S: CPI (Wednesday), jobless claims (Thursday), retail sales, industrial production (Friday).

• CPI (Wednesday): Core CPI for December is expected to remain at 1.6% y/y.

Fed speakers on the wires include Powell, Brainard, and Clarida.

Canada: Nothing of note.

Euro Area: EA industrial production (Wednesday), German Government budget, and German GDP Thursday).

UK: Industrial production and GDP (Friday).