This will be the most economically rich week of the month. The world’s leading central banks (RBA, BoC, ECB, and SNB) will hold monetary policy meetings. All central banks except the RBA are expected to go for another rate cut. At the same time, the Bank of Canada may make a double cut of 0.5% at once. Investors’ main focus should be on central banks’ bias regarding further policy — whether to hold or lower rates. The US inflation data on Wednesday will shed light on the Fed’s plans, which will set the tone for US indices and stocks for the rest of the year.
Monday, December 09
On Monday, we’ll be treated to Japan’s final GDP data (expected to be weaker than last quarter), as well as inflation data from China (expected to grow slightly in annual terms) and Mexico (expected to decrease in annual terms). Lower inflation tends to pressure the national currency, especially with a strong US dollar.
Main events of the day:
- – Japan GDP (q/q) at 01:50 (GMT+2);
- – China Consumer Price Index (m/m) at 03:30 (GMT+2);
- – China Producer Price Index (m/m) at 03:30 (GMT+2);
- – Mexican Inflation Rate (m/m) at 14:00 (GMT+2).
Tuesday, December 10
Tuesday’s main event will be the RBA’s monetary policy meeting. The RBA is expected to hold the rate at 4.35% despite weak GDP data for the last quarter. This is a good opportunity for the Australian dollar to strengthen against currencies where central banks are cutting rates. Asian traders should pay attention to China’s trade balance report, which indirectly impacts currencies such as AUD and NZD, China’s main trading partners.
Main events of the day:
- – Australia NAB Business Confidence (m/m) at 02:30 (GMT+2);
- – China Trade Balance (m/m) at 05:00 (GMT+2);
- – Australia RBA Interest Rate Decision at 05:30 (GMT+2);
- – Australia RBA Monetary Policy Statement at 05:30 (GMT+2);
- – Australia RBA Press Conference at 06:30 (GMT+2);
- – German Consumer Price Index (m/m) at 09:00 (GMT+2).
Wednesday, December 11
On Tuesday, traders mainly focus on the US Consumer Price Index data. Analysts expect US inflation slightly rise to 2.7% from 2.6% y/y. This will likely reinforce confidence that the US Fed will go for a 0.25% rate cut next week. Betting that the Fed will cut rates again was bolstered by Friday’s stronger-than-expected jobs report. Still, any sign that progress in returning inflation to the Fed’s 2% target has stalled will likely cause markets to revise expectations. Investors should also be focused on the Bank of Canada’s monetary policy meeting. A 0.5% rate cut is expected, putting pressure on the Canadian currency, especially against the US dollar, Japanese yen, and Australian dollar. However, if a 0.25% rate cut occurs instead of 0.5%, it would be a surprise and would likely provide temporary support to the Canadian currency.
Main events of the day:
- – US Consumer Price Index (m/m) at 15:30 (GMT+2);
- – Canada BoC Interest Rate Decision at 16:45 (GMT+2);
- – Canada BoC Monetary Policy Statement at 16:45 (GMT+2);
- – Canada BoC Press Conference at 17:30 (GMT+2);
- – US Crude Oil Reserves (w/w) at 17:30 (GMT+2).
Thursday, December 12
Thursday will be the busiest day in terms of economic events. The main events of the day will be the meetings of the Swiss National Bank (SNB) and the European Central Bank (ECB). Both banks are expected to cut the rate by 0.25%. SNB will cut the rate from 1.00% to 0.75%. At the same time, the ECB will cut the rate from 3.40% to 3.15%. Any surprise can cause a spike in volatility. If the cut coincides with a planned one, the main focus should be shifted to the press conference, where, as a rule, the central bank governor gives hints about further steps. The softer the forecast for the next meeting, the more pressure on the national currency. Traders should also pay attention to Australian labor market data on Thursday. A slight increase in employment is expected, which will be positive for the AUD.
- – Australia Unemployment Rate (m/m) at 02:30 (GMT+2);
- – Sweden Inflation Rate (m/m) at 09:00 (GMT+2);
- – Switzerland SNB Interest Rate Decision at 10:30 (GMT+2);
- – Switzerland SNB Monetary Policy Assessment at 10:30 (GMT+2);
- – Switzerland SNB Press Conference at 11:00 (GMT+2);
- – Eurozone ECB Interest Rate Decision at 15:15 (GMT+2);
- – Eurozone ECB Monetary Policy Statement at 15:15 (GMT+2);
- – US Producer Price Index (m/m) at 15:30 (GMT+2);
- – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
- – Eurozone ECB Press Conference at 15:45 (GMT+2);
- – US Natural Gas Storage (w/w) at 17:30 (GMT+2).
Friday, December 13
On Friday, November’s UK GDP and industrial production data will give an updated picture of the economy. The economy is expected to rise by 0.1% monthly, while quarterly growth is also expected to rise by 0.1%. If the data is worse than expected, the British pound could come under pressure, as it will increase the likelihood of a rate cut by the Bank of England (BoE) next week.
Main events of the day:
- – Japan Tankan Manufacturing (q/q) at 01:50 (GMT+2);
- – Japan Non-Tankan Manufacturing (q/q) at 01:50 (GMT+2);
- – German Trade Balance (m/m) at 09:00 (GMT+2);
- – UK GDP (m/m) at 09:00 (GMT+2);
- – UK Industrial Production (m/m) at 09:00 (GMT+2);
- – UK Manufacturing Production (m/m) at 09:00 (GMT+2);
- – Eurozone Industrial Production (m/m) at 12:00 (GMT+2).
by JustMarkets, 2024.12.09
Open Account