On Monday 11th: The Australian Westpac-Melbourne Institute Consumer Sentiment Index is published.
On Tuesday 12th: Australia’s NAB Business Confidence Index is due, along with UK Employment data, ZEW Economic Sentiment Indexes from the EU and Germany, US Inflation figures and the Japanese Tankan Large Manufacturers Sentiment Index.
On Wednesday 13th: UK GDP data, and US PPI figures are due, while the Federal Reserve meets to set Monetary Policy.
On Thursday 14th: Australian Employment figures are due, the Bank of England and European Central Bank meet on Monetary Policy, while the US publishes Retail Sales.
On Friday 15th: China releases its PPI and Retail Sales, while Manufacturing and Services PMIs are due for Japan, France, Germany, the EU, the UK and the US
Weekly outlook
Central Bank meetings will be the major focus of the week for investors coming into mid-December. The final Monetary Policy meetings and Statements of the Fed, BoE and ECB will no doubt be closely parsed by analysts for clues about what to expect for rate cuts next year.
The US Federal Reserve is expected by the debt markets to lower interest rates in the spring of next year. On the other hand, officials think it's too soon to talk about rate reductions until they see more proof that inflation is declining. In October, the Consumer Price Index's annual headline inflation rate was 3.2%, and forecasters don’t see a major improvement coming this week either. Moreover, Fed representatives are hinting that raising interest rates is still a possibility. In the end, however, the Fed and the markets both predict that short-term interest rates will decline in 2024. Stay tuned!
Monday 11th of December
The Australian Westpac-Melbourne Institute Consumer Sentiment Index is due to be released at 11:30 PM GMT today. The Index experienced a decline of 2.6% from 82 in October to 79.9 in November. This marked a significant return to pessimistic levels, as the RBA's rate hike in November rekindled family financial strain and concerns regarding the escalating cost of living and potential future rate hikes. The new results are expected to show an improvement back to 85 after the RBA chose to keep rates on hold last week.
Tuesday 12th of December
With declines across most sectors, the NAB Business Confidence Index in Australia hit a new low of -2 in October, down from a flat reading in the previous month that had been revised downwards. The latest figures are expected to be released at 12:30 AM GMT.
UK Employment data is due to be published at 7:00 AM GMT today. In the three months up to September, the adjusted Unemployment Rate was 4.2%, which was both consistent with market predictions and unchanged from the April to June period. A slight rise to 4.3% is expected for the three months to October.
Meanwhile, Average Weekly Earnings (including bonuses) in the same period climbed 7.9% year over year, the lowest level in four months, but above market expectations of a 7.4% gain. A dip to 6.7% is expected from this report. The Employment Change is also expected to show a gain of 50K new jobs in September, down from 54K the previous month.
The ZEW Indicator of Economic Sentiment for Germany jumped another 10.9 points to 9.8 in November, its highest point since March, indicating that the largest economy in Europe had hit a turning point. Economic expectations are strong, and there are more positive predictions for the German industrial sector and stock markets both at home and abroad. Continuing the trend, the forecast for December, due at 10:00 AM GMT, is expected to come in at around 15.
Meanwhile, November also saw a sharp increase in the ZEW Indicator of Economic Sentiment for the Euro Area, from 2.3 in the previous month to 13.8 in November, well beyond market predictions. A further climb to 16.5 is expected for December.
A range of Inflation data is due for the US from 1:30 PM GMT today. The annual rate of inflation dropped from 3.7% in September and August to 3.2% in October, below the 3.3% predicted by the market. A drop to around 3.1% is forecast for November. The annual core inflation rate, which doesn’t include volatile goods like food and energy, dropped from 4.1% in the previous month to 4%, a two-year low. Expectations are for this figure to remain constant this month.
The Bank of Japan's Tankan Large Manufacturers Sentiment increased to 9 in the third quarter from 5 in the second, marking the highest reading since the second quarter of 2022 and above the market's prediction of 6. A further increase to around 12 is forecast for the new data to be released at 11:50 PM GMT.
Wednesday 13th of December
Following an August GDP growth of 0.1% that was revised downwards, the UK's GDP increased 0.2% month-over-month in September, surpassing predictions of a flat result. When the new figures are released at 7:00 AM GMT, a flat 0 reading is again predicted.
US Producer Prices are due at 1:30 PM GMT today. October saw a 0.5% month over month decline, the worst monthly drop since April 2020, and contrary to market forecasts of a 0.1% gain. The primary driver of the 1.4% decline in goods prices was the 15.3% decline in petrol prices. Analysts expect a 0.1% growth for November.
The Federal Reserve is due to meet on Monetary Policy this week, with the Decision Statement due to be released at 7:00 PM GMT today and Press Conference to follow half an hour later. In November, policymakers maintained the 22-year high of 5.25%-5.5% for the target range of the federal funds rate, underscoring their dual emphasis on avoiding excessive monetary tightening while still aiming to bring inflation to the 2% objective. Expectations are for the board to vote to hold rates again for the final meeting of 2024.
Thursday 14th of December
Australian Employment figures are due at 12:30 AM GMT this morning. In October, there was a rise in Australia's employment numbers of 55K. For November, expectations are for this figure to drop to around 25K. Meanwhile, the Unemployment Rate is expected to remain at 3.7% for November.
The Bank of England is scheduled to meet on Monetary Policy this week, with the Decision Statement to be published at 12:00 PM GMT. During its November meeting, the Bank kept its benchmark interest rate at 5.25%, a level not seen in 15 years. This comes as policymakers assess recent indications of a slowdown in the UK economy and continue to face the problem of persistently high inflation. Expectations are for rates to again be held this coming week.
The European Central Bank is also due to meet on Monetary Policy this week, with the Statement due at 1:15 PM GMT and the Press Conference following at 1:45 PM GMT. At its October meeting, the ECB maintained interest rates at multi-year highs, a departure from its 15-month rate-hiking streak. This reflects a more cautious attitude among policymakers, who are impacted by the slow easing of price pressures and worries about a potential recession. The Bank is again expected to hold rates for their final meeting of the year.
US Retail Sales are due at 1:30 PM GMT today. Sales fell 0.1% month over month in October, ending a six-month uptrend and falling short of the market's expected 0.3% drop. A similar result is also expected for November.
Friday 15th of December
Chinese Industrial Production and Retail Sales figures, among others, are due from 2:00 AM GMT today. In October, China's industrial output increased 4.6% year over year, building on gains in the preceding two months and somewhat surpassing 4.4% market expectations. A further gain to around 5.6% is expected for November. Annualized Retail Sales are also set for growth, surging to 7.6% in October from 5.5% growth the previous month, a further increase to around 12.5% is forecast this month.
A wide range of December Flash Manufacturing and Services PMIs are due across the day from countries such as Japan, France, Germany, the EU, the UK and the US. Since companies often respond swiftly to market situations and their buying managers typically have the most up-to-date and pertinent knowledge about the company's perspective on the economy, these Flash reports are a leading predictor of the state of the economy. If the industry is expanding, it’s signified by a result above 50.0; if it is contracting, it will be below.
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