As central banks announce policy decisions, it's important to consider economic indicators from China, the Eurozone, the UK, and the US as well.
The week begins with the release of consumer price inflation figures, which will set the tone for the US dollar. Following the unexpected Jobs Report, persistent inflation could lead to the Fed delaying discussions about reducing interest rates.
On Wednesday, the producer price numbers for November also require attention. An increase in producer prices could indicate a rise in demand and consumer price inflation driven by demand.
The individual inflation reports and the US Jobs Report will impact the direction of Fed interest rates.
The Fed will announce its interest rate decision, rate statement, economic projections, and hold a press conference on Wednesday. Forward guidance on the timing of a potential Fed rate cut will be important. Fed Chair Powell may surprise the markets by discussing the possibility of a further rate hike.
Thursday will see movements in retail sales and jobless claims, with increased consumer spending potentially leading to demand-driven inflation and necessitating a more hawkish rate path for the Fed.
The week will conclude with preliminary December private sector PMIs, industrial production, and NY Empire State Manufacturing numbers. The Services PMI is likely to have the most influence on Friday, given its significant impact on the US economy and inflation.
ZEW Economic Sentiment numbers for Germany and the Eurozone on Tuesday will influence the EUR/USD. Recent economic indicators have been mixed, giving greater importance to this report. German factory orders, industrial production, and trade figures contrasted with better-than-expected survey-based data.
Eurozone industrial production figures on Wednesday will be important ahead of the ECB monetary policy decision on Thursday. A weak macroeconomic backdrop and softer euro area inflation have led to speculation about an ECB rate cut in the first half of 2024. Forward guidance on inflation, the economy, and interest rates will be crucial.
On Friday, inflation numbers from France, private sector PMIs, Eurozone wage growth, and trade data will wrap up a busy week. Inflation, Services PMIs, and wage growth are likely to influence the appetite for the EUR/USD.
Tuesday will see movements in average earnings and the unemployment rate, impacting the Pound. Wage growth continues to be a concern for the Bank of England. Stable numbers could support the Bank of England’s dismissal of discussions about cutting interest rates.
On Wednesday, the GDP Report will also require attention. A resilient UK economy could allow the BoE to maintain interest rates at current levels for a longer period.
The Bank of England will reveal its final monetary policy decision of 2023 on Thursday. Forward guidance on inflation, the economic outlook, and the likely timing of rate cuts will be crucial, as well as the expected vote split.
Preliminary private sector PMIs for December will be in focus on Friday, with the services sector accounting for over 70% of the UK economy and likely to have the most impact. An increase in service sector activity could give the Bank of England more reason to maintain a more hawkish rate path.
Investors will have to wait until Friday for data that could influence the Canadian dollar, with housing starts and wholesale sales figures being of interest.
However, comments from Bank of Canada Governor Tiff Macklem may have a more significant impact. Last week, the BoC highlighted progress on achieving its inflation target. Any deviations from this stance would be noteworthy.
Additionally, economic indicators from China could impact the buyer appetite for the Canadian dollar.
On Tuesday, business confidence numbers for November will affect the demand for the Australian dollar.
However, employment numbers on Thursday will likely have a greater impact. An upward trend in hiring could boost consumer spending and alleviate concerns about a recession. However, consumer spending, which drives demand-driven inflation, may prompt the RBA to keep rates higher for a longer period.
Economic indicators from China will also need to be considered.
Electronic card retail sales numbers will be of interest on Tuesday, with Q3 GDP numbers on Thursday also requiring consideration. Weaker-than-expected figures could influence the buyer appetite for the New Zealand dollar.
On Friday, Business PMI numbers for November will warrant investor consideration. While New Zealand's numbers will have an impact, economic indicators from China could carry more weight for the New Zealand dollar.
Tankan survey-based figures on Wednesday will impact demand for the Japanese Yen. Better-than-expected numbers would support expectations of a potential shift by the Bank of Japan from negative rates.
Preliminary private sector PMIs for December will also require attention. Weaker-than-expected numbers could influence the timing of a potential policy shift by the BoJ.
Furthermore, investors will need to keep an eye on BoJ commentary. Recent statements have sent mixed signals about the possibility of exiting negative rates.
Industrial production, retail sales, fixed asset investment, and unemployment figures on Friday will impact market risk sentiment.
Weaker figures could raise further concerns about the Chinese economy. Recent trade figures signaled a weak demand environment.
Beyond the economic calendar, discussions about stimulus from Beijing would also affect market risk sentiment.
Subscribe to our daily newsletter and get the best forex trading information and markets status updates
Trade within minutes!
日本語
English
Comment (0)