Week Ahead

In the US, the spotlight will be taken by ISM Non-Manufacturing PMI, the University of Michigan’s consumer sentiment, and PPI data. Investors will also follow interest rate decisions in Australia, Canada, Brazil, and India and inflation rates from China, Brazil, Turkey, Russia, Philippines, Netherlands and Mexico. Finally, German factory orders and trade data from China, Canada, and the US should provide some insides into the state of global demand.

As December rolls out, investors will look for more clues about the health of the world’s largest economy and the Federal Reserve’s rate path. First-tier releases include the ISM Non-Manufacturing PMI, which is expected to show the services sector activity growth slowed down further. Also, PPI data will be in focus with consensus showing an overall decline in inflationary pressures. Investors will also follow factory orders, external trade, and the University of Michigan’s consumer sentiment with a focus on the five-year inflation expectations reading. Finally, earnings season is coming to the end with AutoZone, Broadcom, and Costco Wholesale reporting.

Elsewhere in America, the Bank of Canada is set to hike the borrowing cost by another 50bps while the Central Bank of Brazil will likely keep the rates steady at 13.75%. Canada will also publish the latest trade balance and business confidence data. In Brazil, the inflation rate will be in focus as well as retail sales, business confidence, and S&P Global Services and Manufacturing PMIs. Finally, Mexico will post inflation data and business confidence.

In Europe, final Q3 GDP data is expected to confirm the Euro Area economy expanded the least in the current six-quarter sequence of growth. Also, retail sales across the bloc are set to fall the most in ten months in October and factory orders in Germany are due to drop for the third month in a row. Elsewhere, the inflation rate is set to decrease in both Russia and Turkey. Other data to follow include Global S&P Services PMI for major economies including Spain and Italy; France’s balance of trade; and Switzerland’s unemployment rate. In the United Kingdom, the Halifax house price index, alongside BRC retail sales monitor and S&P Global PMIs will be in the spotlight.

In Australia, the RBA’s December meeting is expected to bring a third consecutive quarter-point increase in the cash rate. Investors also await third-quarter GDP growth data, set to point to a fourth consecutive quarter of steady growth and October’s trade balance. In China, fresh trade data for November is expected to show that both exports and imports have contracted for the second month in a row, deepening concerns of a slowing economy as authorities mull easing strict lockdown rules. The world’s second-largest economy will also publish its November CPI and PPI prints. In Japan, the spotlight will be on October’s current account and the final result for the third quarter’s GDP. In India, the RBI is expected to deliver a fifth consecutive rate hike, with forecasts expecting a slower 35bps raise after three consecutive 50bps increases. Elsewhere, the Philippines will release inflation data for November and the unemployment rate for October.