Week Ahead: Russia, BoJo, and Earnings Season Ahead

Fundamental analysis of Forex market

After three meetings with NATO and its allies over Ukraine left both sides at an impasse, signals are beginning to emerge that Russia may be ready to invade Ukraine.  Will it happen this week? Last week, it was brought to light that Boris Johnson had a party at Downing Street during lockdown.  With his popularity already waning, could this be the end for him.  This week, NFLX will report earnings, the first of the FAANGS. Earnings per share are expected at 0.82. Will they disappoint?  In economic data, last week China and the US released CPI and PPU, with the US printing 7% for CPI!  How high will inflation run this week for the UK and Canada?


Russia held meetings last week with the US, NATO, and the OSEC (Organization for Security and Cooperation in Europe). These meetings were all in the hopes of convincing them that they must meet Russia’s demand that the Ukraine will never become part of NATO.  Russia feels that if this happened, it would threaten their security.  The meetings ended the meetings at an impasse.  As a result, Russia’s Deputy Foreign Minister Sergey Ryabkov said that if their demand is not met this week, there will be a “catastrophic outcome”.  On Friday US intelligence gathered that Russia is preparing an operation to justify an invasion of Ukraine, which could occur between mid-January and mid-February.  Could it happen this week?  Watch for volatility in the Russian Ruble and the Euro as escalations rise.

Boris Johnson

Also last week, Boris Johnson’s staff was outed for having parties during lockdown that lasted until the early morning, including one on the eve of Price Philip’s funeral.  Although Boris Johnson was not at these parties, he allegedly knew about them.  Now he faces questions about breaking Covid lockdown rules.  Johnson already admitted to attending a garden party in May 2020.  Of course, his opposition is calling for him to step down, but that won’t happen immediately.  This all comes at a time when Johnson is dealing with strong criticism over his handling of Brexit. Talks resume on January 24th regarding the Northern Ireland Protocol after new Foreign Secretary Liz Truss met with EU negotiators last week.  The Pound has been on a tear over the last month, up nearly 575 pip vs the US Dollar! Could the bad press for Johnson cause the GBP to pull back?


Earnings season is set to kick into high gear this week as the first of the FAANGs reports earnings.  Netflix is expecting to show earnings of 0.82.  But the key will be in the guidance!  How does Netflix think that higher interest rates will affect their business?  That will be the key question all companies will have to answer this quarter.  Other potential market movers reporting earnings this week are as follows:


Economic Data

This week brings more inflation data, this time from the UK and Canada.  Will their CPI as high as that of the US at 7%?  In addition to CPI, China will have a data dump on Monday morning, both the UK and Australia will release Employment data and the Bank of Japan will meet (nothing ground-breaking is expected).  Monday is also a US bank holiday. Other important economic data due out this week is as follows:


  • Japan: Machinery Orders (NOV)
  • Australia: Building Permits Final (NOV)
  • China: GDP Growth Rate (Q4)
  • China: Industrial Production (DEC)
  • China: Retail Sales (DEC)
  • China: Fixed Asset Investment (YTD)(DEC)


  • Japan: BOJ Interest Rate Decision
  • Japan: Industrial Production Final (NOV)
  • UK: Claimant Count Change (DEC)
  • Germany: ZEW Economic Sentiment Index (JAN)
  • US: NY State Manufacturing Index (JAN)
  • US: NAHB Housing Market Index (JAN)


  • Australia: Westpac Consumer Confidence Index (JAN)
  • Germany: CPI Final (DEC)
  • UK: Inflation Data
  • EU: Construction Output (NOV)
  • Canada: CPI (DEC)
  • US: Housing Starts (DEC)
  • US: Building Permits (DEC)
  • UK: BOE Gov Bailey Speech
  • Crude Inventories


  • Japan: Trade Balance (DEC)
  • Australia: Consumer Inflation Expectations (JAN)
  • Australia: Employment Change (DEC)
  • Germany: PPI (DEC)
  • EU: CPI Final (DEC)
  • Turkey: CBRT Interest Rate Decision
  • US: Philadelphia Fed Manufacturing Index (JAN)
  • US: Existing Home Sales (DEC)


  • Japan: CPI (DEC)
  • UK: Retail Sales (DEC)
  • EU: ECB President Lagarde Speech
  • Canada: Retail Sales (NOV)
  • Canada: New Housing Price Index (DEC)
  • EU: Consumer Confidence Flash (JAN)

Chart of the Week: Weekly USD/JPY

Source: Tradingview, Stone X

When USD/JPY broke above the March 2017 highs at 115.50, it looked like it was on its way to the flag pattern target near 118.00 on the weekly timeframe.  However, 2 weeks ago, price formed a shooting star, an indication that price may be heading lower.  Price continued lower last week indicating a false breakout.  USD/JPY formed a bearish engulfing candle, closing at the lower end of the weekly trading range between 113.48 and 115.85. First resistance is at the lows of the price action from 2 weeks ago near 114.95.  Above there is last week’s high at 115.85, then the 2022 high at 116.35.   Support is at last week’s low of 113.48, just above horizontal support at 113.32.  If price breaks below, there is a band of support between 111.65 and 112.83, and then the 50 Day Moving Average at 110.60.

Markets saw plenty of volatility last week as US inflation was high and Fed hawks were out in force.  Will other countries follow this week?  Also, make sure to keep an eye on the headlines as tensions rise between Russia and NATO.  The Euro and Ruble could be affected.  And, any talk of Boris Johnson stepping down could hit the Pound.  Watch for the volatility to continue this week!

Have a great weekend!