Last week was marked by low volatility with the market focused on U.S. data from the industrial production, constructions, and other sectors. These data points indicate a likely economic slowdown in the U.S. soon.

There's hope for a soft landing from the Fed, but if the labour market remains tight and there's no sufficient evidence of inflation cooling down, the bank might keep rates high for a longer time.

Another important event was the BoJ meeting where many hoped for signals of monetary policy changes, but such decisions will now fall to the next Governor.

Kuroda, who spent years fighting deflation, hinted that monetary policy will remain unchanged for a longer time, but the next Governor might have a different approach considering that inflation is running hot in Japan -- though not as high as in other developed countries.

The main events of the week ahead are:

Tuesday -- PMIs for the euro area and the U.K.; the flash services PMI and flash manufacturing PMI for the U.S.; and the CPI for New Zealand.

Wednesday -- The inflation data for Australia; the BoC monetary policy report, rate statement, overnight rate and press conference in Canada.

Thursday -- the GDP and the new home sales in the U.S.

Friday -- the personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge.

There are no Fed members scheduled to speak this week as the blackout period has started.

In the eurozone the expectation is that both the services PMI and the manufacturing PMI will print above expectations reflecting that the economy is less impacted than many analysts anticipated. The main driver could be the softer than expected energy prices which have boosted activity in several sectors.

The U.K. services PMI is likely to print in line with analyst expectations.

The inflation data for New Zealand can provide clues about what the RBNZ might do next in terms of monetary policy. There are some signs that inflation will cool down, but currently remains elevated compared to the bank's target of 1-3%.

The BoC hiked the rate by 50bps at the last meeting to a terminal rate of 4.50%. The consensus for this week's meeting is a 25bps rate hike as the Governor stressed that hiking rates excessively could push the economy into an "unnecessary painful recession". The inflation remains high which means the rate hiking cycle might not be over yet, but some analysts expect a pause after this meeting.

Inflation data for Australia is likely to print higher than expected, so the RBA might be forced to hike by 25bps at the next meeting in February.

The consensus for the U.S. GDP is 2.6%, which would be softer than the previous one, but in positive territory. In a blog post from September, the Federal Reserve Bank of St. Louis argued that the GDP might not be the right tool to gauge whether the economy is in recession, but rather the lesser known GDI (gross domestic income).

The GDP is a lagging indicator compared to alternative methods like PMIs and ISMs, which have shown contractions in Q4. The GDI was softer than the GDP in both Q2 and Q3 last year, so the U.S. economy might already be in a recession according to analysts from Nomura.

The analyst consensus for the next FOMC meeting in February is for a 25bps hike, but if the PCE surprises on the upside, we could see a 50bps hike. Right now, core PCE is expected to have a 0.2% or 0.3% rise for December m/m.

USD/CAD expectations

On the H1 chart the pair closed the week near 1.3350. A break below this level opens the path for future depreciation targeting 1.3260, the next level of support. The Canadian dollar is also likely to be supported by rising oil prices after China's reopening.

On the upside, the next levels of resistance are at 1.3490 and 1.3550. A risk for this trade is the BoC meeting this week, but in the short term the overall picture for USD/CAD is bearish.

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GBP/CHF expectations

Last week, SNB Chairman Jordan reiterated that the bank is committed to fighting inflation which means future hikes will likely follow.

The pair closed the week near the 1.1400 level of resistance. A correction is expected until the 1.1345 or even 1.1350 level of support. If that level holds, the uptrend should resume targeting 1.1460.

On the downside, the next levels of support are at 1.1225 and 1.1160.

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This article was written by Gina Constantin.