It will be a busy week in the US with the most important releases including the PCE price index, personal income and spending, CB, and the University of Michigan’s consumer sentiment and durable goods orders. Elsewhere, Japan and Canada will release inflation data and the Bank of Japan will hold a monetary policy meeting. Also, investors will follow German’s Ifo Business Climate, and consumer confidence readings from Euro Area and UK, and Germany.
In the US, the spotlight will be taken by the PCE price index, which will provide further insights into the Federal Reserve’s rate path. Core PCE inflation likely rose 0.2% over the previous month, resulting in the annual rate easing to 4.7% from 5%. On top of that, it would be interesting to follow a final reading for third-quarter GDP, CB consumer confidence, personal income & spending, durable goods orders, and the University of Michigan’s consumer sentiment. Meanwhile, building permits, housing starts, existing home sales, and new home sales will offer further clues about the real estate market’s health. Also, a slew of earnings results will provide more insight into how corporate America performed against macro headwinds. FedEx, General Mills, Nike, Cintas, Micron Technology, and Paychex are the most prominent companies to report results.
Elsewhere in America, Canada will publish the latest CPI and retail sales data. The headline inflation is seen falling 0.1% month-on-month, resulting in the annual rate of inflation easing to 6.5% from 6.9%.
Across the Atlantic, the UK will publish the final estimate of third-quarter GDP, current account, public sector net borrowing, and the CBI gauges for industrial trends orders and distributive trades. Preliminary data showed Britain’s economy contracted for the first time in 1-1/2-years in the third quarter, which is predicted to be the beginning of the country’s longest recession since records began. The Bank of England expects the economy to contract by 0.75% in the second half of 2022 and continue to fall in 2023 and the first half of 2024, as high inflation and interest rates weigh sharply on households and businesses.
Elsewhere in Europe, the Eurozone flash consumer confidence is expected to improve for the second consecutive month in December but still remain below its long-term average. Also, both the German GFK consumer indicator and the Ifo business climate indicator are set to increase for the third month. Other data to follow include Euro Area construction output; German producer inflation; Italy’s business and consumer survey; Sweden’s house prices index and Switzerland’s balance of trade and current account. Meanwhile, the Central Bank of Turkey is likely to keep rates steady when it meets on Thursday, after cutting its key rate by 1000 bps since September 2021.
In Asia, the People’s Bank of China will meet to decide on its loan prime rate after leaving it unchanged for three consecutive meetings. November data showed that credit expanded at a slower-than-expected rate despite recent efforts by the PBoC to ease restrictions on property loans and boost lending. Meanwhile, the Bank of Japan is expected to maintain its loose monetary stance and guidance, leaving its key rate unchanged at -0.1%. Investors also await CPI print for Japan, Malaysia, and Singapore, and the Indonesian central bank’s monetary policy decision. In Australia, the RBA will divulge minutes from its latest meeting for insights on the bank’s third straight 25bps rate increase. In New Zealand, in the focus will be trade figures for November and business confidence gauges for December.