On Monday 18th: Germany’s Business Climate index is due to be released.
On Tuesday 19th: The RBA publishes its Minutes from the last Monetary Policy Meeting, the BoJ meets to set Monetary Policy, while Canada reports Inflation data, US Building Permits are due and Japan releases its Trade Balance.
On Wednesday 20th: Germany releases its GfK Consumer Confidence Indicator, the UK publishes Inflation figures, US Existing Home Sales are due, and the BOC releases its Summary of Deliberations.
On Thursday 21st: US GDP data is due, along with Japanese Inflation and their Monetary Policy Minutes.
On Friday 22nd: UK Retail Sales and GDP are due, while the US publishes PCE Prices, Durable Goods Orders, Personal Income and Expenses among others.
Weekly outlook
As we approach the holiday season, there is a wide range of interesting and significant data this week that will engage investors and traders.
While many industrialised countries are already effectively managing the negative effects of excessive inflation now, investors continue to monitor these figures in hopes of gaining insight into when the central banks may begin to lower interest rates. This week, the US, Japan, the UK, and Canada are some of the nations to keep an eye on. All countries, with the exception of Japan, have concluded their annual Monetary Policy Meetings, so we’ll have to wait until after the holidays for how the banks will respond to this new data.
Monday 18th of December
The Ifo Business Climate index for Germany increased for the second consecutive month in November to 87.3, which was just less than the market estimate. However, as businesses were less gloomy about their present business environment and their prospects for the next few months, sentiment reached its highest level in four months. A further move to around 88.1 is forecast for December for the largest economy in Europe, when the new data is released at 9:00 AM GMT.
Tuesday 19th of December
The Reserve Bank of Australia is due to release its Minutes from its most recent Monetary Policy Meeting today at 12:30 AM GMT. The RBA kept its cash rate unchanged at 4.35% at its last meeting of the year, as predicted. The action will enable the central bank, led by Governor Michele Bullock, to examine the effect of past rate rises.
The Bank of Japan is due to meet on Monetary Policy today, with the Statement released at 3:00 AM GMT. As predicted, the BoJ maintained its benchmark short-term interest rate at -0.1% and 10-year bond rates at about 0% in October. The central bank also redefined 1.0% as a flexible "upper bound" rather than a cap and dropped its intention to maintain it. Since July, the long-term interest rate limit has increased from 0.5% to 1%, and in a quarterly outlook report, the BoJ raised its FY 2023 and 2024 inflation predictions to 2.8% from 1.3% and 1.2%, above its 2% objective.
Inflation in Canada slowed to 3.1% in October from 3.8% in September, falling just short of market expectations of 3.2%. This was at odds with the Bank of Canada's prediction that inflation would stay near 3.5% until mid-2019, further underscoring market bets that the central bank is not going to implement another rate hike. The new Inflation figures for November are due to be released at 1:30 PM GMT.
Preliminary US Building Permits are due to be released at 1:30 PM GMT today. Revised data revealed that the number of permits issued increased by 1.8% annually to 1.498 million in October, compared to the initial estimate of 1.487 million. Nevertheless, it failed to surpass the 10-month peak of 1.541 million observed in August. A dip to around 1.48 million is expected for November.
Japan reports on its Trade Balance today after last month’s deficit shrank dramatically to JPY 662.55 billion from JPY 2,205,94 billion in the same month the previous year. November figures are due to be released at 11:50 PM GMT.
Wednesday 20th of December
After a downwardly revised -28.3 in November, Germany’s GfK Consumer Confidence Indicator climbed slightly to -27.8 going into December, while market expectations were for -27.9. The general mood is still characterised by uncertainty, however, when the new results are published at 7:00 AM GMT, the forecast for January is for another rise to around -24.
The UK will publish its Inflation figures today from 7:00 AM GMT. The headline annualised rate fell to 4.6% in October from 6.7% in September and August of the previous year, below the 4.8% market estimate. This is the lowest rate since October 2021, partly because energy costs have dropped recently after Ofgem decided to cut the home bill maximum. A further fall to around 4% is expected for November. Meanwhile, the core rate is also expected to fall from 5.7% to around 5.4% this month.
Pre-owned house sales in the US fell 4.1% month over month in October, to a seasonally adjusted annualised rate of 3.79 million units, the lowest level since August 2010, and far below estimates of 3.9 million. The housing market is still being weighed down by a chronic dearth of inventory and the highest mortgage rates in a generation. When the new data is released at 3:00 PM GMT, consensus forecasts are for a further drop to around 3.78 million for November.
The Bank of Canada will release its Summary of Deliberations today at 6:30 PM GMT. The BOC maintained its overnight rate of 5% for the third time in a row in December, in line with market forecasts, leaving borrowing rates at a 22-year high.
Thursday 21st of December
The US is due to confirm final GDP data for the third quarter from 1:30 PM GMT today. Preliminary reports indicate that the US economy increased by an annualised 5.2% in Q3 2023, above the preliminary estimate of 4.9% and estimates of 5%. It is the highest growth rate since the fourth quarter of 2021.
Japan's annual inflation rate increased to 3.3% in October, up from 3.0% the previous month, and the highest reading since July. When the new data is made available at 11:30 PM GMT, expectations are for a decent drop to around 2.6% for November.
From 11:50 PM GMT this evening, the Bank of Japan will also release the minutes from its Monetary Policy Meeting, which concluded earlier on in the week.
Friday 22nd of December
Retail sales figures in the UK are due to be released at 7:00 AM GMT today. Sales declined 0.3% month over month in October, after an upwardly revised 1.1% drop in September and falling short of the 0.3% gain predicted by the market. A reversal is expected for November of around 0.6% gain.
Also due from the UK are the confirmed final GDP figures for the third quarter. The British economy supposedly grew 0.6% year over year over the period, the same as in the previous quarter and slightly higher than estimates of 0.5%.
A large range of data is due from the US across the afternoon today. In October, Core PCE prices in the US climbed by 0.2% from the previous month, matching market expectations and slowing after a 0.3% gain in September. The annual rate, which is considered the Federal Reserve's preferred measure of inflation, fell to 3.5%, the lowest level since April 2021. In addition, the headline index remained at 3%, a decrease from 3.4% the previous month and in line with expectations. The updated figures are expected to be made available at 1:30 PM GMT.
New Durable Goods Orders in the US fell 5.4% month over month, reversing a 4.0% increase in September. It was the second-largest drop in durable goods orders since April 2020, owing mostly to lower demand for transportation equipment. An increase of 1.7% is expected for November when the results are published at 1:30 PM GMT.
Also due from the US, are Personal Income and Expenses data. Personal income climbed 0.2% month over month in October, the smallest gain in four months and in line with market expectations. Personal Spending increased by 0.2% month over month in October, after a 0.7% gain in September. It was the weakest gain in five months, owing mostly to the effect of high interest rates. Both are expected to rise slightly for November, of around 0.4% and 0.2% respectively month over month.
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