On Monday 4th: Germany’s Trade Balance and Swiss Inflation figures are due for release.
On Tuesday 5th: The Reserve Bank of Australia meets on Monetary Policy, the US ISM Services PMI is due, and US JOLTs Job Openings are published.
On Wednesday 6th: Australian GDP is published, along with the US ADP Employment Change, the US Trade Balance, the Canadian Ivey Purchasing Managers Index and the BoC meets on Monetary Policy.
On Thursday 7th: Australia and China publish their Trade Balances.
On Friday 8th: US Employment data is due today, including Non farm Payrolls and the Unemployment Rate, the US also publishes Preliminary Consumer Confidence from the University of Michigan.
Weekly outlook
It's a big week ahead in Monetary Policy Meetings and Employment data from the US this week.
After raising its cash rate to a 12-year high of 4.35% last month, the Reserve Bank of Australia will hold its last rate meeting of the year this week and will not meet again until February. Interestingly, at the end of November, the OECD, an organization that speaks for wealthy nations, updated its global economic forecast.
According to its Australian division, the RBA is likely finished raising interest rates for the time being. Inflation is expected to decline to the target zone by the end of 2025, according to the research, which predicts 75 basis points of interest rate decreases from the third quarter of 2024 to the end of 2025. The cash rate will remain at this current restrictive level until around then.
US Nonfarm Payrolls will also be well worth watching, as the Federal Reserve will be meeting for its final Monetary Policy Meeting later on in the month. Payroll numbers have still been relatively strong lately, and are likely part of why the FOMC might consider raising rates again.
According to Federal Reserve Governor Michelle Bowman last week, more increases in borrowing rates are likely to be necessary for the central bank to achieve its 2% inflation objective within a reasonable timeframe. However, a softer jobs report may help to weaken that stance. Moreover, other Federal Reserve officials suggested this week that the central bank is advancing in fighting inflation, and it might be nearing the end of raising its tightening cycle.
Monday 4th of December
Against market estimates of EUR 16.3 billion, Germany's trade surplus dropped to EUR 16.5 billion in September 2023 from an upwardly revised EUR 17.7 billion in the previous month. The trade surplus was at its lowest since May, with a greater decline in exports than imports. New figures for October are due for release at 7:00 AM GMT today.
Swiss Inflation figures are due to be published today at 7:30 AM GMT today. In October, their annual inflation rate remained constant at 1.7%, in line with market expectations and the previous month's data. A slight rise to 1.9% is expected for November.
Tuesday 5th of December
Following four meetings where Australia’s Official Cash Rate had remained at 4.1%, the RBA approved an increase by 25 basis points to 4.35% in November, in accordance with market expectations. The decision caused borrowing rates to reach their highest point since January 2011. This week’s meeting concludes with the Decision Statement release at 3:30 AM GMT. A recent OECD report concluded that the RBA should be finished with raising rates for the time being.
The US ISM Services PMI for October showed a drop to 51.8, the lowest level in the previous five months, and below the 53 predictions. When the new report is released at 3:00 PM GMT, expectations are for a further dip to 51.5 for November.
Also from the US, JOLTs Job Openings for October are anticipated to be released at 3:00 PM GMT. In September, there were 9.55 million new job opportunities, up 56,000 from the previous month. This was the highest level in four months and it was higher than the market estimate, which was 9.25 million. The forecast for this coming month is a slight dip to around 9.4 million new openings.
Wednesday 6th of December
While market expectations were for a 0.3% expansion in Q2 2023, the Australian economy actually grew 0.4% quarter over quarter, matching the rate of an upwardly revised Q1 number. Net trade had a positive impact, as exports increased more than imports, leading to economic growth for the seventh consecutive period. When the new figures are released at 12:30 AM GMT, expectations are for a 0.3% growth quarter over quarter, but also 1.7% on an annualized basis.
The US ADP Employment Change is due at 1:15 PM GMT today. In October, private enterprises in the US added 113,000 people to their payrolls, somewhat less than market predictions of a 150,000 increase and after a prior gain of 89,000. However, monthly employment additions continued to surpass the 70,000-100,000 range needed to handle the rising working-age population, indicating that the labor market is clearly displaying indications of progressive relaxation but remains healthy. A slight dip to around 95,000 is expected for November.
The US reports its Balance of Trade today at 1:30 PM GMT. In September, the deficit increased to $61.5 billion, surpassing both the market's prediction of $59.9 billion and an upwardly corrected $58.7 billion shortfall in August. Nevertheless, its trade deficit ranks third-lowest since 2021. A deficit increase to around $64.6 is expected for October.
Despite missing market expectations of 54, the Ivey Purchasing Managers Index in Canada increased to 53.4 in October from 53.1 in September. Amid diminishing pricing pressures, the most recent estimate showed that economic activity has been expanding positively for three straight months. The new data is to be released at 3:00 PM GMT today.
The Bank of Canada is due to meet on Monetary Policy today, with the Decision Statement due at 3:00 PM GMT. In line with what financial markets had anticipated, the BoC kept the target overnight rate at 5% at its October meeting, keeping borrowing costs at a 22-year high. The bank also signaled that it would base future rate decisions on the most recent economic signs. The Governing Council warned against over tightening after previous interest rate rises stifled economic activity and capped price growth, prompting the decision to prolong the tightening pause for a second time.
Thursday 7th of December
After an upwardly revised AUD 10.16 billion in August, Australia's trade surplus on goods slipped to a 30-month low of AUD 6.79 billion in September, missing market expectations of a AUD 9.4 billion gain as imports increased and exports decreased. The newest figure is due to be released at 12:30 AM GMT.
China's trade surplus in October fell significantly short of market expectations of USD 82 billion, coming in at USD 56.53 billion from USD 82.35 billion in the same month the year before. It was the lowest trade surplus since February as imports unexpectedly increased while exports decreased more than anticipated as a result of ongoing sluggish foreign demand. The new data, released at 3:00 AM GMT today, is expected to fall to around USD 51 billion.
Friday 8th of December
US Nonfarm Payrolls are due at 1:30 PM GMT today. October saw the US economy create 150,000 jobs, which was below market expectations of 180,000 and half of September's revised 297,000. The survey revealed that the labor market is gradually cooling, but around 170,000 new jobs are expected to have been created for November.
Meanwhile, October saw a rise in the US Unemployment Rate to 3.9%, which was only just higher than market projections and the 3.8% recorded the previous month. With a rise of 144,000 to 6.51 million, the unemployment rate is at its highest level since January 2022. Expectations are for this figure to hold steady for November.
The University of Michigan consumer confidence index for the US was revised up to 61.3 in November from a preliminary of 60.4, although it remained at its lowest level since May. It was the fourth consecutive drop in consumer confidence, as improved current evaluations and forecasts of personal finances were countered by a significant decrease in predicted business conditions. When the latest preliminary data is released at 3:00 PM GMT, forecasts are for a minor increase to around 61.4.
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