The outlook for the new year is dominated by this one fear: recession.

Major economies such as the UK and Eurozone are believed to be already going through an economic contraction. The US – the world’s largest economy - expected to experience a downturn later this year.

As we emerge out of a rough year dominated by soaring inflation, slowing global growth, heightened geopolitical risks and Covid-19, the early part of 2023 looks like it could be more of the same story.

As we make fresh resolutions (especially those that pertain to trading/investing), here's a head start on the potential opportunities ahead, starting with these key economic events and data releases in the first week of the new year:
 

Monday, January 2

This year has been fraught with market volatility, to say the least.

As we bid goodbye to 2022, let’s recap 3 major themes, each beginning with the letter F, that rocked major assets over the past 12 months:

Markets are very much in holiday mode with very thin volumes and light liquidity.

This means we see choppy price action with swings between gains and losses in very quick time. Big trading desks at banks and funds are manned with skeletal staff so position sizing is minimal and new bets are not being taken until the new year.

Stock markets are gaining while the US dollar is softening after China announced it would drop its quarantine requirements for inbound visitors. This further eases three-year border controls aimed at curbing Covid-19.

The authorities also downgraded the seriousness of the virus as it gradually evolves into a common respiratory infection. The latest policy moves from China indicated that economic activity in most major cities may return to normal very quickly which is positive for investors.

The week following the Christmas weekend features sparse economic data releases and events, as markets wind down 2022.

As much of the western world continues revelling in the festivities, markets may adopt a more Asian-centric focus over the coming week:

Monday, December 26

In our latest Week Ahead article (posted on Fridays), we posed the question:

“Can USDJPY break below its 200-day SMA?”

We now have the answer: Yes!

But not only did this FX pair go beyond that widely-watched technical indicator, it smashed right past!

After the Fed, BOE and the ECB have all had their say this week, up steps the Bank of Japan over the coming week, amid these other scheduled economic data releases and events:

Monday, December 19

Asian shares flashed red on Thursday, tracking declines in Wall Street overnight after the Federal Reserve signalled interest rates will climb higher than anticipated.