Week Ahead

Third quarter GDP updates for the US, UK, Spain and Netherlands will be in the spotlight next week, alongside US personal income and outlays and durable goods orders, Eurozone consumer morale, and Japan and Australia retail trade numbers. Elsewhere, central banks in China, Thailand and Turkey will deliver their monetary policy decisions. Traders will also react to any further development in US stimulus talks and post-Brexit trade negotiations.

Market activity is expected to drop significantly next week as the Christmas holiday break begins, with several bourses across the globe closing on December 25th. German stock market also closes on December 24th, while in the US and the UK, trading ends early on Christmas Eve. On Friday, investors were still waiting for the US Congress to deliver a stimulus package, and following negotiations between the EU and Britain over a post-Brexit trade deal.

Meanwhile, some important economic data releases in the US will be keenly watched. The final estimate of GDP is set to confirm the economy rebounded at a record pace in the third quarter, from a historic contraction seen in the previous period, mainly supported by a recovery in consumer spending and business investment. Other notable publications include: personal income and outlays; PCE price index; durable goods orders; CB consumer confidence; existing and new home sales; Chicago Fed National Activity Index; and the final reading of Michigan consumer sentiment.

Elsewhere in America, key economic data to follow include Canada monthly GDP and new home prices; Mexico’s trade balance, retail sales, unemployment and economic activity; Brazil mid-month CPI; and Argentina foreign trade, current account and economic activity.

Across the Atlantic, the UK will publish the final estimate of third-quarter GDP, current account, public sector net borrowing, CBI Distributive Trades and new car sales scheduled. Preliminary data showed Britain’s economy expanded at a record 15.5 percent in the third quarter, partially recovering from the steep contraction recorded in the previous three-month, reflecting the continued easing of lockdown restrictions.

Elsewhere, the Eurozone flash consumer confidence is expected to improve slightly in December, still remaining well below pre-pandemic levels; while the German GFK consumer climate will probably drop further to a six-month low heading into January 2021. Traders will also keep an eye on Italy and Turkey business and consumer survey; Spain and the Netherlands final third-quarter GDP numbers; and Norway, Finland and Poland jobless rates. Also, the Central Bank of Turkey is seen hiking its benchmark interest rate by another 150bps when it meets on Thursday, as the country’s consumer price inflation remains well above the central bank’s target.

In Asia, the People’s Bank of China will provide an update to its new loan prime rate (LPR) on Monday, but no changes are expected. Meanwhile, investors in Japan turn their attention to the unemployment rate, retail trade, housing starts and Tokyo inflation; while Australia’s flash retail sales and private sector credit will also be keenly watched.

Other key data for the Asia-Pacific region include: South Korea producer prices; Thailand interest rate decision and foreign trade; Malaysia inflation rate; and Taiwan unemployment data.