United States Labor Market Conditions Index: 2.9 (December) vs 0.5

The most important economic events this week include the BoE’s rate decision, UK’s industrial and manufacturing production data, China’s trade balance, Australia’s employment report and of course the US producer price index and retail sales data scheduled to be released on Friday. Japan’s machinery order data will also be released this week and if market expectations hold true, machinery orders are seen falling sharply from the erstwhile 10.3 per cent increase. In the wake of the heightening tensions over China’s slowing economy, markets will closely watch the trade balance data. China’s central bank last week had devalued the yuan twice with the primary objective of helping exporters. China’s weak fundamentals have made investors jittery and had caused stock prices to slide first on Monday and then again later in the week.